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Antony C. Sutton 



Chapter I: 

The Actors on the Revolutionary Stage 

Chapter II: 

Trotsky Leaves New York to Complete the Revolution 

Woodrow Wilson and a Passport for Trotsky 
Canadian Government Documents on Trotsky's Release 
Canadian Military Intelligence Views Trotsky 
Trotsky's Intentions and Objectives 

Chapter III: 

Lenin and German Assistance for the Bolshevik Revolution 

The Sisson Documents 

The Tug-of-War in Washington 

Chapter IV: 

Wall Street and the World Revolution 

American Bankers and Tsarist Loans 

Olof Aschberg in New York, 1916 

Olof Aschberg in the Bolshevik Revolution 

Nya Banken and Guaranty Trust Join Ruskombank 

Guaranty Trust and German Espionage in the United States, 1914-1917 

The Guaranty Trust-Minotto-Caillaux Threads 

Chapter V: 

The American Red Cross Mission in Russia — 1917 

American Red Cross Mission to Russia — 1917 
American Red Cross Mission to Rumania 
Thompson in Kerensky's Russia 
Thompson Gives the Bolsheviks $1 Million 
Socialist Mining Promoter Raymond Robins 
The International Red Cross and Revolution 

> • • 

Chapter VI: 

Consolidation and Export of the Revolution 

A Consultation with Lloyd George 

Thompson's Intentions and Objectives 

Thompson Returns to the United States 

The Unofficial Ambassadors: Robins, Lockhart, and Sadoul 

Exporting the Revolution: Jacob H. Rubin 

Exporting the Revolution: Robert Minor 

Chapter VII: 

The Bolsheviks Return to New York 

A Raid on the Soviet Bureau in New York 
Corporate Allies for the Soviet Bureau 
European Bankers Aid the Bolsheviks 

Chapter VIII: 

120 Broadway, New York City 

American International Corporation 

The Influence of American International on the Revolution 

The Federal Reserve Bank of New York 

American-Russian Industrial Syndicate Inc. 

John Reed: Establishment Revolutionary 

John Reed and the Metropolitan Magazine 

Chapter IX: 

Guaranty Trust Goes to Russia 

Wall Street Comes to the Aid of Professor Lomonossoff 
The Stage Is Set for Commercial Exploitation of Russia 
Germany and the United States Struggle for Russian Business 
Soviet Gold and American Banks 
Max May of Guaranty Trust Becomes Director of Ruskombank 

Chapter X: 

J.P. Morgan Gives a Little Help to the Other Side 

United Americans Formed to Fight Communism 
United Americans Reveals "Startling Disclosures" on Reds 
Conclusions Concerning United Americans 
Morgan and Rockefeller Aid Kolchak 

• • • 

Chapter XI: 

The Alliance of Bankers and Revolution 

The Evidence Presented: A Synopsis 
The Explanation for the Unholy Alliance 
The Marburg Plan 

Appendix I: 

Directors of Major Banks, 
Firms, and Institutions Mentioned 
in This Book (as in 1917-1918) 

Appendix II: 

The Jewish-Conspiracy Theory of the 
Bolshevik Revolution 

Appendix III: 

Selected Documents from Government 
Files of the United States and Great Britain 

> • • 


those unknown Russian libertarians, also 

known as Greens, who in 1919 fought both 

the Reds and the Whites in their attempt to 

gain a free and voluntary Russia 

Copyright 2001 

This work was created with the permission of Antony C. Sutton. 

All rights reserved. No portion of this book may be reproduced without written permission from the 
author, except by a reviewer who may quote brief passages in connection with a review. 

HTML version created in the United States of America by Studies in Reformed Theology 


Since the early 1920s, numerous pamphlets and articles, even a few books, have sought to forge a 
link between "international bankers" and "Bolshevik revolutionaries." Rarely have these attempts 
been supported by hard evidence, and never have such attempts been argued within the framework 
of a scientific methodology. Indeed, some of the "evidence" used in these efforts has been 
fraudulent, some has been irrelevant, much cannot be checked. Examination of the topic by 
academic writers has been studiously avoided; probably because the hypothesis offends the neat 
dichotomy of capitalists versus Communists (and everyone knows, of course, that these are bitter 
enemies). Moreover, because a great deal that has been written borders on the absurd, a sound 
academic reputation could easily be wrecked on the shoals of ridicule. Reason enough to avoid the 

Fortunately, the State Department Decimal File, particularly the 861.00 section, contains extensive 
documentation on the hypothesized link. When the evidence in these official papers is merged with 
nonofficial evidence from biographies, personal papers, and conventional histories, a truly 
fascinating story emerges. 

We find there was a link between some New York international bankers and many revolutionaries, 
including Bolsheviks. These banking gentlemen — who are here identified — had a financial stake 
in, and were rooting for, the success of the Bolshevik Revolution. 

Who, why — and for how much — is the story in this book. 

Antony C. Sutton 

March 1974 

> • • 

Chapter I 


Dear Mr. President: 

I am in sympathy with the Soviet form of government as that best suited for the 
Russian people... 

Letter to President Woodrow Wilson (October 17, 1918) from William Lawrence Saunders, 
chairman, Inger soil-Rand Corp.; director, American International Corp.; and deputy 
chairman, Federal Reserve Bank of New York 

The frontispiece in this book was drawn by cartoonist Robert Minor in 1911 for the St. Louis Post- 
Dispatch. Minor was a talented artist and writer who doubled as a Bolshevik revolutionary, got 
himself arrested in Russia in 1915 for alleged subversion, and was later bank-rolled by prominent 
Wall Street financiers. Minor's cartoon portrays a bearded, beaming Karl Marx standing in Wall 
Street with Socialism tucked under his arm and accepting the congratulations of financial luminaries 
J.P. Morgan, Morgan partner George W. Perkins, a smug John D. Rockefeller, John D. Ryan of 
National City Bank, and Teddy Roosevelt — prominently identified by his famous teeth — in the 
background. Wall Street is decorated by Red flags. The cheering crowd and the airborne hats 
suggest that Karl Marx must have been a fairly popular sort of fellow in the New York financial 

Was Robert Minor dreaming? On the contrary, we shall see that Minor was on firm ground in 
depicting an enthusiastic alliance of Wall Street and Marxist socialism. The characters in Minor's 
cartoon — Karl Marx (symbolizing the future revolutionaries Lenin and Trotsky), J. P. Morgan, 
John D. Rockefeller — and indeed Robert Minor himself, are also prominent characters in this 

The contradictions suggested by Minor's cartoon have been brushed under the rug of history 
because they do not fit the accepted conceptual spectrum of political left and political right. 
Bolsheviks are at the left end of the political spectrum and Wall Street financiers are at the right 
end; therefore, we implicitly reason, the two groups have nothing in common and any alliance 
between the two is absurd. Factors contrary to this neat conceptual arrangement are usually rejected 
as bizarre observations or unfortunate errors. Modern history possesses such a built-in duality and 
certainly if too many uncomfortable facts have been rejected and brushed under the rug, it is an 
inaccurate history. 

On the other hand, it may be observed that both the extreme right and the extreme left of the 
conventional political spectrum are absolutely collectivist. The national socialist (for example, the 
fascist) and the international socialist (for example, the Communist) both recommend totalitarian 
politico-economic systems based on naked, unfettered political power and individual coercion. Both 
systems require monopoly control of society. While monopoly control of industries was once the 
objective of J. P. Morgan and J. D. Rockefeller, by the late nineteenth century the inner sanctums of 
Wall Street understood that the most efficient way to gain an unchallenged monopoly was to "go 
political" and make society go to work for the monopolists — under the name of the public good 
and the public interest. This strategy was detailed in 1906 by Frederick C. Howe in his Confessions 
of a Monopolist.- Howe, by the way, is also a figure in the story of the Bolshevik Revolution. 

Therefore, an alternative conceptual packaging of political ideas and politico-economic systems 

would be that of ranking the degree of individual freedom versus the degree of centralized political 

• • • 


control. Under such an ordering the corporate welfare state and socialism are at the same end of the 
spectrum. Hence we see that attempts at monopoly control of society can have different labels while 
owning common features. 

Consequently, one barrier to mature understanding of recent history is the notion that all capitalists 
are the bitter and unswerving enemies of all Marxists and socialists. This erroneous idea originated 
with Karl Marx and was undoubtedly useful to his purposes. In fact, the idea is nonsense. There has 
been a continuing, albeit concealed, alliance between international political capitalists and 
international revolutionary socialists — to their mutual benefit. This alliance has gone unobserved 
largely because historians — with a few notable exceptions — have an unconscious Marxian bias 
and are thus locked into the impossibility of any such alliance existing. The open-minded reader 
should bear two clues in mind: monopoly capitalists are the bitter enemies of laissez-faire 
entrepreneurs; and, given the weaknesses of socialist central planning, the totalitarian socialist state 
is a perfect captive market for monopoly capitalists, if an alliance can be made with the socialist 
powerbrokers. Suppose — and it is only hypothesis at this point — that American monopoly 
capitalists were able to reduce a planned socialist Russia to the status of a captive technical colony? 
Would not this be the logical twentieth-century internationalist extension of the Morgan railroad 
monopolies and the Rockefeller petroleum trust of the late nineteenth century? 

Apart from Gabriel Kolko, Murray Rothbard, and the revisionists, historians have not been alert for 
such a combination of events. Historical reporting, with rare exceptions, has been forced into a 
dichotomy of capitalists versus socialists. George Kennan's monumental and readable study of the 
Russian Revolution consistently maintains this fiction of a Wall Street-Bolshevik dichotomy.- 
Russia Leaves the War has a single incidental reference to the J.P. Morgan firm and no reference at 
all to Guaranty Trust Company. Yet both organizations are prominently mentioned in the State 
Department files, to which frequent reference is made in this book, and both are part of the core of 
the evidence presented here. Neither self-admitted "Bolshevik banker" Olof Aschberg nor Nya 
Banken in Stockholm is mentioned in Kennan yet both were central to Bolshevik funding. 
Moreover, in minor yet crucial circumstances, at least crucial for our argument, Kennan is factually 
in error. For example, Kennan cites Federal Reserve Bank director William Boyce Thompson as 
leaving Russia on November 27, 1917. This departure date would make it physically impossible for 
Thompson to be in Petrograd on December 2, 1917, to transmit a cable request for $1 million to 
Morgan in New York. Thompson in fact left Petrograd on December 4, 1918, two days after 
sending the cable to New York. Then again, Kennan states that on November 30, 1917, Trotsky 
delivered a speech before the Petrograd Soviet in which he observed, "Today I had here in the 
Smolny Institute two Americans closely connected with American Capitalist elements "According 
to Kennan, it "is difficult to imagine" who these two Americans "could have been, if not Robins and 
Gumberg." But in [act Alexander Gumberg was Russian, not American. Further, as Thompson was 
still in Russia on November 30, 1917, then the two Americans who visited Trotsky were more than 
likely Raymond Robins, a mining promoter turned do-gooder, and Thompson, of the Federal 
Reserve Bank of New York. 

The Bolshevization of Wall Street was known among well informed circles as early as 1919. The 
financial journalist Barron recorded a conversation with oil magnate E. H. Doheny in 1919 and 
specifically named three prominent financiers, William Boyce Thompson, Thomas Lamont and 
Charles R. Crane: 

Aboard S.S. Aquitania, Friday Evening, February 1, 1919. 

Spent the evening with the Dohenys in their suite. Mr. Doheny said: If you believe in 
democracy you cannot believe in Socialism. Socialism is the poison that destroys 
democracy. Democracy means opportunity for all. Socialism holds out the hope that a man 
can quit work and be better off. Bolshevism is the true fruit of socialism and if you will read 

the interesting testimony before the Senate Committee about the middle of January that 

• • • 

showed up all these pacifists and peace-makers as German sympathizers, Socialists, and 
Bolsheviks, you will see that a majority of the college professors in the United States are 
teaching socialism and Bolshevism and that fifty-two college professors were on so-called 
peace committees in 1914. President Eliot of Harvard is teaching Bolshevism. The worst 
Bolshevists in the United States are not only college professors, of whom President Wilson 
is one, but capitalists and the wives of capitalists and neither seem to know what they are 
talking about. William Boyce Thompson is teaching Bolshevism and he may yet convert 
Lamont of J.P. Morgan & Company. Vanderlip is a Bolshevist, so is Charles R. Crane. 
Many women are joining the movement and neither they, nor their husbands, know what it 
is, or what it leads to. Henry Ford is another and so are most of those one hundred historians 
Wilson took abroad with him in the foolish idea that history can teach youth proper 
demarcations of races, peoples, and nations geographically. - 

In brief, this is a story of the Bolshevik Revolution and its aftermath, but a story that departs from 
the usual conceptual straitjacket approach of capitalists versus Communists. Our story postulates a 
partnership between international monopoly capitalism and international revolutionary socialism for 
their mutual benefit. The final human cost of this alliance has fallen upon the shoulders of the 
individual Russian and the individual American. Entrepreneurship has been brought into disrepute 
and the world has been propelled toward inefficient socialist planning as a result of these monopoly 
maneuverings in the world of politics and revolution. 

This is also a story reflecting the betrayal of the Russian Revolution. The tsars and their corrupt 
political system were ejected only to be replaced by the new powerbrokers of another corrupt 
political system. Where the United States could have exerted its dominant influence to bring about a 
free Russia it truckled to the ambitions of a few Wall Street financiers who, for their own purposes, 
could accept a centralized tsarist Russia or a centralized Marxist Russia but not a decentralized free 
Russia. And the reasons for these assertions will unfold as we develop the underlying and, so far, 
untold history of the Russian Revolution and its aftermath.- 


'"These are the rules of big business. They have superseded the teachings of our parents and 
are reducible to a simple maxim: Get a monopoly; let Society work for you: and remember 
that the best of all business is politics, for a legislative grant, franchise, subsidy or tax 
exemption is worth more than a Kimberly or Comstock lode, since it does not require any 
labor, either mental or physical, lot its exploitation" (Chicago: Public Publishing, 1906), p. 

2George F. Kennan, Russia Leaves the War (New York: Atheneum, 1967); and Decision to 
Intervene.. Soviet-American Relations, 1917-1920 (Princeton, N.J.: Princeton University 
Press, 1958). 

3Arthur Pound and Samuel Taylor Moore, They Told Barron (New York: Harper & 
Brothers, 1930), pp. 13-14. 

4There is a parallel, and also unknown, history with respect to the Makhanovite movement 
that fought both the "Whites" and the "Reds" in the Civil War of 1919-20 (see Voline, The 
Unknown Revolution [New York: Libertarian Book Club, 1953]). There was also the 
"Green" movement, which fought both Whites and Reds. The author has never seen even 
one isolated mention of the Greens in any history of the Bolshevik Revolution. Yet the 
Green Army was at least 700,000 strong! 

• • • 

Chapter II 


You will have a revolution, a terrible revolution. What course it takes will depend much on 
what Mr. Rockefeller tells Mr. Hague to do. Mr. Rockefeller is a symbol of the American 
ruling class and Mr. Hague is a symbol of its political tools. 

Leon Trotsky, in New York Times, December 13, 1938. (Hague was a New Jersey 

In 1916, the year preceding the Russian Revolution, internationalist Leon Trotsky was expelled 
from France, officially because of his participation in the Zimmerwald conference but also no doubt 
because of inflammatory articles written for Nashe Slovo, a Russian-language newspaper printed in 
Paris. In September 1916 Trotsky was politely escorted across the Spanish border by French police. 
A few days later Madrid police arrested the internationalist and lodged him in a "first-class cell" at a 
charge of one-and-one-haft pesetas per day. Subsequently Trotsky was taken to Cadiz, then to 
Barcelona finally to be placed on board the Spanish Transatlantic Company steamer Monserrat. 
Trotsky and family crossed the Atlantic Ocean and landed in New York on January 13, 1917. 

Other Trotskyites also made their way westward across the Atlantic. Indeed, one Trotskyite group 
acquired sufficient immediate influence in Mexico to write the Constitution of Queretaro for the 
revolutionary 1917 Carranza government, giving Mexico the dubious distinction of being the first 
government in the world to adopt a Soviet-type constitution. 

How did Trotsky, who knew only German and Russian, survive in capitalist America? According to 
his autobiography, My Life, "My only profession in New York was that of a revolutionary socialist." 
In other words, Trotsky wrote occasional articles for Novy Mir, the New York Russian socialist 
journal. Yet we know that the Trotsky family apartment in New York had a refrigerator and a 
telephone, and, according to Trotsky, that the family occasionally traveled in a chauffeured 
limousine. This mode of living puzzled the two young Trotsky boys. When they went into a 
tearoom, the boys would anxiously demand of their mother, "Why doesn't the chauffeur come in?" 1 
The stylish living standard is also at odds with Trotsky's reported income. The only funds that 
Trotsky admits receiving in 1916 and 1917 are $310, and, said Trotsky, "I distributed the $310 
among five emigrants who were returning to Russia." Yet Trotsky had paid for a first-class cell in 
Spain, the Trotsky family had traveled across Europe to the United States, they had acquired an 
excellent apartment in New York — paying rent three months in advance — and they had use of a 
chauffeured limousine. All this on the earnings of an impoverished revolutionary for a few articles 
for the low-circulation Russian-language newspaper Nashe Slovo in Paris and Novy Mir in New 

Joseph Nedava estimates Trotsky's 1917 income at $12.00 per week, "supplemented by some 
lecture fees."- Trotsky was in New York in 1917 for three months, from January to March, so that 
makes $144.00 in income from Novy Mir and, say, another $100.00 in lecture fees, for a total of 
$244.00. Of this $244.00 Trotsky was able to give away $310.00 to his friends, pay for the New 
York apartment, provide for his family — and find the $10,000 that was taken from him in April 
1917 by Canadian authorities in Halifax. Trotsky claims that those who said he had other sources of 
income are "slanderers" spreading "stupid calumnies" and "lies," but unless Trotsky was playing the 
horses at the Jamaica racetrack, it can't be done. Obviously Trotsky had an unreported source of 

• • • 

What was that source? In The Road to Safety, author Arthur Willert says Trotsky earned a living by 
working as an electrician for Fox Film Studios. Other writers have cited other occupations, but there 
is no evidence that Trotsky occupied himself for remuneration otherwise than by writing and 

Most investigation has centered on the verifiable fact that when Trotsky left New York in 1917 for 
Petrograd, to organize the Bolshevik phase of the revolution, he left with $10,000. In 1919 the U.S. 
Senate Overman Committee investigated Bolshevik propaganda and German money in the United 
States and incidentally touched on the source of Trotsky's $10,000. Examination of Colonel 
Hurban, Washington attache to the Czech legation, by the Overman Committee yielded the 

COL. HURBAN: Trotsky, perhaps, took money from Germany, but Trotsky will deny it. 
Lenin would not deny it. Miliukov proved that he got $10,000 from some Germans while he 
was in America. Miliukov had the proof, but he denied it. Trotsky did, although Miliukov 
had the proof. 

SENATOR OVERMAN: It was charged that Trotsky got $10,000 here. 

COL. HURBAN: I do not remember how much it was, but I know it was a question between 
him and Miliukov. 

SENATOR OVERMAN: Miliukov proved it, did he? 

COL. HURBAN: Yes, sir. 

SENATOR OVERMAN: Do you know where he got it from? 

COL. HURBAN: I remember it was $10,000; but it is no matter. I will speak about their 
propaganda. The German Government knew Russia better than anybody, and they knew that 
with the help of those people they could destroy the Russian army. 

(At 5:45 o'clock p.m. the subcommittee adjourned until tomorrow, Wednesday, February 19, 
at 10:30 o'clock a-m.) 1 

It is quite remarkable that the committee adjourned abruptly before the source of Trotsky's funds 
could be placed into the Senate record. When questioning resumed the next day, Trotsky and his 
$10,000 were no longer of interest to the Overman Committee. We shall later develop evidence 
concerning the financing of German and revolutionary activities in the United States by New York 
financial houses; the origins of Trotsky's $10,000 will then come into focus. 

An amount of $10,000 of German origin is also mentioned in the official British telegram to 
Canadian naval authorities in Halifax, who requested that Trotsky and party en route to the 
revolution be taken off the S.S. Kristianiajjord (see page 28). We also learn from a British 
Directorate of Intelligence report- that Gregory Weinstein, who in 1919 was to become a prominent 
member of the Soviet Bureau in New York, collected funds for Trotsky in New York. These funds 
originated in Germany and were channeled through the Volks-zeitung, a German daily newspaper in 
New York and subsidized by the German government. 

While Trotsky's funds are officially reported as German, Trotsky was actively engaged in American 
politics immediately prior to leaving New York for Russia and the revolution. On March 5, 1917, 
American newspapers headlined the increasing possibility of war with Germany; the same evening 
Trotsky proposed a resolution at the meeting of the New York County Socialist Party "pledging 
Socialists to encourage strikes and resist recruiting in the event of war with Germany."- Leon 


Trotsky was called by the New York Times "an exiled Russian revolutionist." Louis C. Fraina, who 
cosponsored the Trotsky resolution, later — under an alias — wrote an uncritical book on the 
Morgan financial empire entitled House of Morgan.- The Trotsky-Fraina proposal was opposed by 
the Morris Hillquit faction, and the Socialist Party subsequently voted opposition to the resolution.- 

More than a week later, on March 16, at the time of the deposition of the tsar, Leon Trotsky was 
interviewed in the offices of Novy Mir.. The interview contained a prophetic statement on the 
Russian revolution: 

"... the committee which has taken the place of the deposed Ministry in Russia did not 
represent the interests or the aims of the revolutionists, that it would probably be shortlived 
and step down in favor of men who would be more sure to carry forward the 
democratization of Russia. "- 

The "men who would be more sure to carry forward the democratization of Russia," that is, the 
Mensheviks and the Bolsheviks, were then in exile abroad and needed first to return to Russia. The 
temporary "committee" was therefore dubbed the Provisional Government, a title, it should be 
noted, that was used from the start of the revolution in March and not applied ex post facto by 


President Woodrow Wilson was the fairy godmother who provided Trotsky with a passport to 
return to Russia to "carry forward" the revolution. This American passport was accompanied by a 
Russian entry permit and a British transit visa. Jennings C. Wise, in Woodrow Wilson: Disciple of 
Revolution, makes the pertinent comment, "Historians must never forget that Woodrow Wilson, 
despite the efforts of the British police, made it possible for Leon Trotsky to enter Russia with an 
American passport." 

President Wilson facilitated Trotsky's passage to Russia at the same time careful State Department 
bureaucrats, concerned about such revolutionaries entering Russia, were unilaterally attempting to 
tighten up passport procedures. The Stockholm legation cabled the State Department on June 13, 
1917, just after Trotsky crossed the Finnish-Russian border, "Legation confidentially informed 
Russian, English and French passport offices at Russian frontier, Tornea, considerably worried by 
passage of suspicious persons bearing American passports." 2 

To this cable the State Department replied, on the same day, "Department is exercising special care 
in issuance of passports for Russia"; the department also authorized expenditures by the legation to 
establish a passport-control office in Stockholm and to hire an "absolutely dependable American 
citizen" for employment on control work.— But the bird had flown the coop. Menshevik Trotsky 
with Lenin's Bolsheviks were already in Russia preparing to "carry forward" the revolution. The 
passport net erected caught only more legitimate birds. For example, on June 26, 1917, Herman 
Bernstein, a reputable New York newspaperman on his way to Petrograd to represent the New York 
Herald, was held at the border and refused entry to Russia. Somewhat tardily, in mid- August 1917 
the Russian embassy in Washington requested the State Department (and State agreed) to "prevent 
the entry into Russia of criminals and anarchists... numbers of whom have already gone to 
Russia. "- 

Consequently, by virtue of preferential treatment for Trotsky, when the S.S. Kristianiafjord left 
New York on March 26, 1917, Trotsky was aboard and holding a U.S. passport — and in company 
with other Trotskyire revolutionaries, Wall Street financiers, American Communists, and other 
interesting persons, few of whom had embarked for legitimate business. This mixed bag of 
passengers has been described by Lincoln Steffens, the American Communist: 


The passenger list was long and mysterious. Trotsky was in the steerage with a group of 
revolutionaries; there was a Japanese revolutionist in my cabin. There were a lot of Dutch 
hurrying home from Java, the only innocent people aboard. The rest were war messengers, 
two from Wall Street to Germany....— 

Notably, Lincoln Steffens was on board en route to Russia at the specific invitation of Charles 
Richard Crane, a backer and a former chairman of the Democratic Party's finance committee. 
Charles Crane, vice president of the Crane Company, had organized the Westinghouse Company in 
Russia, was a member of the Root mission to Russia, and had made no fewer than twenty-three 
visits to Russia between 1890 and 1930. Richard Crane, his son, was confidential assistant to then 
Secretary of State Robert Lansing. According to the former ambassador to Germany William Dodd, 
Crane "did much to bring on the Kerensky revolution which gave way to Communism."— And so 
Steffens' comments in his diary about conversations aboard the S.S. Kristianiajjord are highly 
pertinent:" ... all agree that the revolution is in its first phase only, that it must grow. Crane and 
Russian radicals on the ship think we shall be in Petrograd for the re -revolution.— 

Crane returned to the United States when the Bolshevik Revolution (that is, "the re-revolution") had 
been completed and, although a private citizen, was given firsthand reports of the progress of the 
Bolshevik Revolution as cables were received at the State Department. For example, one 
memorandum, dated December 11, 1917, is entitled "Copy of report on Maximalist uprising for Mr 
Crane." It originated with Maddin Summers, U.S. consul general in Moscow, and the covering letter 
from Summers reads in part: 

I have the honor to enclose herewith a copy of same [above report] with the request that it be 
sent for the confidential information of Mr. Charles R. Crane. It is assumed that the 
Department will have no objection to Mr. Crane seeing the report ....— 

In brief, the unlikely and puzzling picture that emerges is that Charles Crane, a friend and backer of 
Woodrow Wilson and a prominent financier and politician, had a known role in the "first" 
revolution and traveled to Russia in mid-1917 in company with the American Communist Lincoln 
Steffens, who was in touch with both Woodrow Wilson and Trotsky. The latter in turn was carrying 
a passport issued at the orders of Wilson and $10,000 from supposed German sources. On his return 
to the U.S. after the "re-revolution," Crane was granted access to official documents concerning 
consolidation of the Bolshevik regime: This is a pattern of interlocking — if puzzling — events that 
warrants further investigation and suggests, though without at this point providing evidence, some 
link between the financier Crane and the revolutionary Trotsky. 


Documents on Trotsky's brief stay in Canadian custody are now de-classified and available from the 
Canadian government archives. According to these archives, Trotsky was removed by Canadian and 
British naval personnel from the S.S. Kristianiajjord at Halifax, Nova Scotia, on April 3, 1917, 
listed as a German prisoner of war, and interned at the Amherst, Nova Scotia, internment station for 
German prisoners. Mrs. Trotsky, the two Trotsky boys, and five other men described as "Russian 
Socialists" were also taken off and interned. Their names are recorded by the Canadian files as: 
Nickita Muchin, Leiba Fisheleff, Konstantin Romanchanco, Gregor Teheodnovski, Gerchon 
Melintchansky and Leon Bronstein Trotsky (all spellings from original Canadian documents). 

Canadian Army form LB-1, under serial number 1098 (including thumb prints), was completed for 
Trotsky, with a description as follows: "37 years old, a political exile, occupation journalist, born in 
Gromskty, Chuson, Russia, Russian citizen." The form was signed by Leon Trotsky and his full 
name given as Leon Bromstein (sic) Trotsky. 

• • • 

The Trotsky party was removed from the S.S. Kris tianiafj or d under official instructions received by 
cablegram of March 29, 1917, London, presumably originating in the Admiralty with the naval 
control officer, Halifax. The cablegram reported that the Trotsky party was on the 
"Christianiafjord" (sic) and should be "taken off and retained pending instructions." The reason 
given to the naval control officer at Halifax was that "these are Russian Socialists leaving for 
purposes of starting revolution against present Russian government for which Trotsky is reported to 
have 10,000 dollars subscribed by Socialists and Germans." 

On April 1, 1917, the naval control officer, Captain O. M. Makins, sent a confidential memorandum 
to the general officer commanding at Halifax, to the effect that he had "examined all Russian 
passengers" aboard the S.S. Kristianiafjord and found six men in the second-class section: "They 
are all avowed Socialists, and though professing a desire to help the new Russian Govt., might well 
be in league with German Socialists in America, and quite likely to be a great hindrance to the 
Govt, in Russia just at present." Captain Makins added that he was going to remove the group, as 
well as Trotsky's wife and two sons, in order to intern them at Halifax. A copy of this report was 
forwarded from Halifax to the chief of the General Staff in Ottawa on April 2, 1917. 

The next document in the Canadian files is dated April 7, from the chief of the General Staff, 
Ottawa, to the director of internment operations, and acknowledges a previous letter (not in the 
files) about the internment of Russian socialists at Amherst, Nova Scotia: ". . . in this connection, 
have to inform you of the receipt of a long telegram yesterday from the Russian Consul General, 
MONTREAL, protesting against the arrest of these men as they were in possession of passports 
issued by the Russian Consul General, NEW YORK, U.S.A." 

The reply to this Montreal telegram was to the effect that the men were interned "on suspicion of 
being German," and would be released only upon definite proof of their nationality and loyalty to 
the Allies. No telegrams from the Russian consul general in New York are in the Canadian files, 
and it is known that this office was reluctant to issue Russian passports to Russian political exiles. 
However, there is a telegram in the files from a New York attorney, N. Aleinikoff, to R. M. Coulter, 
then deputy postmaster general of Canada. The postmaster general's office in Canada had no 
connection with either internment of prisoners of war or military activities. Accordingly, this 
telegram was in the nature of a personal, nonofficial intervention. It reads: 

DR. R. M. COULTER, Postmaster Genl. OTTAWA Russian political exiles returning to 
Russia detained Halifax interned Amherst camp. Kindly investigate and advise cause of the 
detention and names of all detained. Trust as champion of freedom you will intercede on 
their behalf. Please wire collect. NICHOLAS ALEINIKOFF 

On April 11, Coulter wired Aleinikoff, "Telegram received. Writing you this afternoon. You should 
receive it tomorrow evening. R. M. Coulter." This telegram was sent by the Canadian Pacific 
Railway Telegraph but charged to the Canadian Post Office Department. Normally a private 
business telegram would be charged to the recipient and this was not official business. The follow- 
up Coulter letter to Aleinikoff is interesting because, after confirming that the Trotsky party was 
held at Amherst, it states that they were suspected of propaganda against the present Russian 
government and "are supposed to be agents of Germany." Coulter then adds," . . . they are not what 
they represent themselves to be"; the Trotsky group is "...not detained by Canada, but by the 
Imperial authorities." After assuring Aleinikoff that the detainees would be made comfortable, 
Coulter adds that any information "in their favour" would be transmitted to the military authorities. 
The general impression of the letter is that while Coulter is sympathetic and fully aware of Trotsky's 
pro-German links, he is unwilling to get involved. On April 1 1 Arthur Wolf of 134 East Broadway, 
New York, sent a telegram to Coulter. Though sent from New York, this telegram, after being 
acknowledged, was also charged to the Canadian Post Office Department. 

• • • 

Coulter's reactions, however, reflect more than the detached sympathy evident in his letter to 
Aleinikoff. They must be considered in the light of the fact that these letters in behalf of Trotsky 
came from two American residents of New York City and involved a Canadian or Imperial military 
matter of international importance. Further, Coulter, as deputy postmaster general, was a Canadian 
government official of some standing. Ponder, for a moment, what would happen to someone who 
similarly intervened in United States affairs! In the Trotsky affair we have two American residents 
corresponding with a Canadian deputy postmaster general in order to intervene in behalf of an 
interned Russian revolutionary. 

Coulter's subsequent action also suggests something more than casual intervention. After Coulter 
acknowledged the Aleinikoff and Wolf telegrams, he wrote to Major General Willoughby Gwatkin 
of the Department of Militia and Defense in Ottawa — a man of significant influence in the 
Canadian military — and attached copies of the Aleinikoff and Wolf telegrams: 

These men have been hostile to Russia because of the way the Jews have been treated, and 
are now strongly in favor of the present Administration, so far as I know. Both are 
responsible men. Both are reputable men, and I am sending their telegrams to you for what 
they may be worth, and so that you may represent them to the English authorities if you 
deem it wise. 

Obviously Coulter knows — or intimates that he knows — a great deal about Aleinikoff and Wolf. 
His letter was in effect a character reference, and aimed at the root of the internment problem — 
London. Gwatkin was well known in London, and in fact was on loan to Canada from the War 
Office in London.— 

Aleinikoff then sent a letter to Coulter to thank him 

most heartily for the interest you have taken in the fate of the Russian Political Exiles .... 
You know me, esteemed Dr. Coulter, and you also know my devotion to the cause of 
Russian freedom .... Happily I know Mr. Trotsky, Mr. Melnichahnsky, and Mr. 
Chudnowsky . . . intimately. 

It might be noted as an aside that if Aleinikoff knew Trotsky "intimately," then he would also 
probably be aware that Trotsky had declared his intention to return to Russia to overthrow the 
Provisional Government and institute the "re-revolution." On receipt of Aleinikoff s letter, Coulter 
immediately (April 16) forwarded it to Major General Gwatkin, adding that he became acquainted 
with Aleinikoff "in connection with Departmental action on United States papers in the Russian 
language" and that Aleinikoff was working "on the same lines as Mr. Wolf . . . who was an escaped 
prisoner from Siberia." 

Previously, on April 14, Gwatkin sent a memorandum to his naval counterpart on the Canadian 
Military Interdepartmental Committee repeating that the internees were Russian socialists with 
"10,000 dollars subscribed by socialists and Germans." The concluding paragraph stated: "On the 
other hand there are those who declare that an act of high-handed injustice has been done." Then on 
April 16, Vice Admiral C. E. Kingsmill, director of the Naval Service, took Gwatkin's intervention 
at face value. In a letter to Captain Makins, the naval control officer at Halifax, he stated, "The 
Militia authorities request that a decision as to their (that is, the six Russians) disposal may be 
hastened." A copy of this instruction was relayed to Gwatkin who in turn informed Deputy 
Postmaster General Coulter. Three days later Gwatkin applied pressure. In a memorandum of April 
20 to the naval secretary, he wrote, "Can you say, please, whether or not the Naval Control Office 
has given a decision?" 

On the same day (April 20) Captain Makins wrote Admiral Kingsmill explaining his reasons for 

removing Trotsky; he refused to be pressured into making a decision, stating, "I will cable to the 

• • • 

Admiralty informing them that the Militia authorities are requesting an early decision as to their 
disposal." However, the next day, April 21, Gwatkin wrote Coulter: "Our friends the Russian 
socialists are to be released; and arrangements are being made for their passage to Europe." The 
order to Makins for Trotsky's release originated in the Admiralty, London. Coulter acknowledged 
the information, "which will please our New York correspondents immensely." 

While we can, on the one hand, conclude that Coulter and Gwatkin were intensely interested in the 
release of Trotsky, we do not, on the other hand, know why. There was little in the career of either 
Deputy Postmaster General Coulter or Major General Gwatkin that would explain an urge to release 
the Menshevik Leon Trotsky. 

Dr. Robert Miller Coulter was a medical doctor of Scottish and Irish parents, a liberal, a Freemason, 
and an Odd Fellow. He was appointed deputy postmaster general of Canada in 1897. His sole claim 
to fame derived from being a delegate to the Universal Postal Union Convention in 1906 and a 
delegate to New Zealand and Australia in 1908 for the "All Red" project. All Red had nothing to do 
with Red revolutionaries; it was only a plan for all-red or all-British fast steamships between Great 
Britain, Canada, and Australia. 

Major General Willoughby Gwatkin stemmed from a long British military tradition (Cambridge and 
then Staff College). A specialist in mobilization, he served in Canada from 1905 to 1918. Given 
only the documents in the Canadian files, we can but conclude that their intervention in behalf of 
Trotsky is a mystery. 


We can approach the Trotsky release case from another angle: Canadian intelligence. Lieutenant 
Colonel John Bayne MacLean, a prominent Canadian publisher and businessman, founder and 
president of MacLean Publishing Company, Toronto, operated numerous Canadian trade journals, 
including the Financial Post. MacLean also had a long-time association with Canadian Army 

In 1918 Colonel MacLean wrote for his own MacLean 's magazine an article entitled "Why Did We 
Let Trotsky Go? How Canada Lost an Opportunity to Shorten the War."— The article contained 
detailed and unusual information about Leon Trotsky, although the last half of the piece wanders off 
into space remarking about barely related matters. We have two clues to the authenticity of the 
information. First, Colonel MacLean was a man of integrity with excellent connections in Canadian 
government intelligence. Second, government records since released by Canada, Great Britain, and 
the United States confirm MacLean's statement to a significant degree. Some MacLean statements 
remain to be confirmed, but information available in the early 1970s is not necessarily inconsistent 
with Colonel MacLean's article. 

MacLean's opening argument is that "some Canadian politicians or officials were chiefly 
responsible for the prolongation of the war [World War I], for the great loss of life, the wounds and 
sufferings of the winter of 1917 and the great drives of 1918." 

Further, states MacLean, these persons were (in 1919)doing everything possible to prevent 
Parliament and the Canadian people from getting the related facts. Official reports, including those 
of Sir Douglas Haig, demonstrate that but for the Russian break in 1917 the war would have been 
over a year earlier, and that "the man chiefly responsible for the defection of Russia was Trotsky... 
acting under German instructions." 

Who was Trotsky? According to MacLean, Trotsky was not Russian, but German. Odd as this 
assertion may appear it does coincide with other scraps of intelligence information: to wit, that 


Trotsky spoke better German than Russian, and that he was the Russian executive of the German 
"Black Bond." According to MacLean, Trotsky in August 1914 had been "ostentatiously" expelled 
from Berlin;— he finally arrived in the United States where he organized Russian revolutionaries, as 
well as revolutionaries in Western Canada, who "were largely Germans and Austrians traveling as 
Russians." MacLean continues: 

Originally the British found through Russian associates that Kerensky,— Lenin and some 
lesser leaders were practically in German pay as early as 1915 and they uncovered in 1916 
the connections with Trotsky then living in New York. From that time he was closely 
watched by... the Bomb Squad. In the early part of 1916 a German official sailed for New 
York. British Intelligence officials accompanied him. He was held up at Halifax; but on their 
instruction he was passed on with profuse apologies for the necessary delay. After much 
manoeuvering he arrived in a dirty little newspaper office in the slums and there found 
Trotsky, to whom he bore important instructions. From June 1916, until they passed him on 
[to] the British, the N.Y. Bomb Squad never lost touch with Trotsky. They discovered that 
his real name was Braunstein and that he was a German, not a Russian.— 

Such German activity in neutral countries is confirmed in a State Department report (316-9-764-9) 
describing organization of Russian refugees for revolutionary purposes. 

Continuing, MacLean states that Trotsky and four associates sailed on the "S.S. Christiania" (sic), 
and on April 3 reported to "Captain Making" (sic) and were taken off the ship at Halifax under the 
direction of Lieutenant Jones. (Actually a party of nine, including six men, were taken off the S.S. 
Kristianiajjord. The name of the naval control officer at Halifax was Captain O. M. Makins, R.N. 
The name of the officer who removed the Trotsky party from the ship is not in the Canadian 
government documents; Trotsky said it was "Machen.") Again, according to MacLean, Trotsky's 
money came "from German sources in New York." Also: 

generally the explanation given is that the release was done at the request of Kerensky but 
months before this British officers and one Canadian serving in Russia, who could speak the 
Russian language, reported to London and Washington that Kerensky was in German 



Trotsky was released "at the request of the British Embassy at Washington . . . [which] acted on the 
request of the U.S. State Department, who were acting for someone else." Canadian officials "were 
instructed to inform the press that Trotsky was an American citizen travelling on an American 
passport; that his release was specially demanded by the Washington State Department." Moreover, 
writes MacLean, in Ottawa "Trotsky had, and continues to have, strong underground influence. 
There his power was so great that orders were issued that he must be given every consideration." 

The theme of MacLean's reporting is, quite evidently, that Trotsky had intimate relations with, and 
probably worked for, the German General Staff. While such relations have been established 
regarding Lenin — to the extent that Lenin was subsidized and his return to Russia facilitated by the 
Germans — it appears certain that Trotsky was similarly aided. The $10,000 Trotsky fund in New 
York was from German sources, and a recently declassified document in the U.S. State Department 
files reads as follows: 

March 9, 1918 to: American Consul, Vladivostok from Polk, Acting Secretary of State, 
Washington D.C. 

For your confidential information and prompt attention: Following is substance of message 
of January twelfth from Von Schanz of German Imperial Bank to Trotsky, quote Consent 
imperial bank to appropriation from credit general staff of five million roubles for sending 
assistant chief naval commissioner Kudrisheff to Far East. 


This message suggests some liaison between Trotsky and the Germans in January 1918, a time 
when Trotsky was proposing an alliance with the West. The State Department does not give the 
provenance of the telegram, only that it originated with the War College Staff. The State 
Department did treat the message as authentic and acted on the basis of assumed authenticity. It is 
consistent with the general theme of Colonel MacLean's article. 


Consequently, we can derive the following sequence of events: Trotsky traveled from New York to 
Petrograd on a passport supplied by the intervention of Woodrow Wilson, and with the declared 
intention to "carry forward" the revolution. The British government was the immediate source of 
Trotsky's release from Canadian custody in April 1917, but there may well have been "pressures." 
Lincoln Steffens, an American Communist, acted as a link between Wilson and Charles R. Crane 
and between Crane and Trotsky. Further, while Crane had no official position, his son Richard was 
confidential assistant to Secretary of State Robert Lansing, and Crane senior was provided with 
prompt and detailed reports on the progress of the Bolshevik Revolution. Moreover, Ambassador 
William Dodd (U.S. ambassador to Germany in the Hitler era) said that Crane had an active role in 
the Kerensky phase of the revolution; the Steffens letters confirm that Crane saw the Kerensky 
phase as only one step in a continuing revolution. 

The interesting point, however, is not so much the communication among dissimilar persons like 
Crane, Steffens, Trotsky, and Woodrow Wilson as the existence of at least a measure of agreement 
on the procedure to be followed — that is, the Provisional Government was seen as "provisional," 
and the "re -revolution" was to follow. 

On the other side of the coin, interpretation of Trotsky's intentions should be cautious: he was adept 
at double games. Official documentation clearly demonstrates contradictory actions. For example, 
the Division of Far Eastern Affairs in the U.S. State Department received on March 23, 1918, two 
reports stemming from Trotsky; one is inconsistent with the other. One report, dated March 20 and 
from Moscow, originated in the Russian newspaper Russkoe Slovo. The report cited an interview 
with Trotsky in which he stated that any alliance with the United States was impossible: 

The Russia of the Soviet cannot align itself... with capitalistic America for this would be a 
betrayal It is possible that Americans seek such an rapprochement with us, driven by its 
antagonism towards Japan, but in any case there can be no question of an alliance by us of 
any nature with a bourgeoisie nation.— 

The other report, also originating in Moscow, is a message dated March 17, 1918, three days earlier, 
and from Ambassador Francis: "Trotsky requests five American officers as inspectors of army 
being organized for defense also requests railroad operating men and equipment."— 

This request to the U.S. is of course inconsistent with rejection of an "alliance." 

Before we leave Trotsky some mention should be made of the Stalinist show trials of the 1930s and, 
in particular, the 1938 accusations and trial of the "Anti-Soviet bloc of rightists and Trotskyites." 
These forced parodies of the judicial process, almost unanimously rejected in the West, may throw 
light on Trotsky's intentions. 

The crux of the Stalinist accusation was that Trotskyites were paid agents of international 
capitalism. K. G. Rakovsky, one of the 1938 defendants, said, or was induced to say, "We were the 
vanguard of foreign aggression, of international fascism, and not only in the USSR but also in 
Spain, China, throughout the world." The summation of the "court" contains the statement, "There 

• • • 

is not a single man in the world who brought so much sorrow and misfortune to people as Trotsky. 
He is the vilest agent of fascism 


Now while this may be no more than verbal insults routinely traded among the international 
Communists of the 1930s and 40s, it is also notable that the threads behind the self-accusation are 
consistent with the evidence in this chapter. And further, as we shall see later, Trotsky was able to 
generate support among international capitalists, who, incidentally, were also supporters of 
Mussolini and Hitler.— 

So long as we see all international revolutionaries and all international capitalists as implacable 
enemies of one another, then we miss a crucial point — that there has indeed been some operational 
cooperation between international capitalists, including fascists. And there is no a priori reason why 
we should reject Trotsky as a part of this alliance. 

This tentative, limited reassessment will be brought into sharp focus when we review the story o£ 
Michael Gruzenberg, the chief Bolshevik agent in Scandinavia who under the alias of Alexander 
Gumberg was also a confidential adviser to the Chase National Bank in New York and later to 
Floyd Odium of Atlas Corporation. This dual role was known to and accepted by both the Soviets 
and his American employers. The Gruzenberg story is a case history of international revolution 
allied with international capitalism. 

Colonel MacLean's observations that Trotsky had "strong underground influence" and that his 
"power was so great that orders were issued that he must be given every consideration" are not at all 
inconsistent with the Coulter-Gwatkin intervention in Trotsky's behalf; or, for that matter, with 
those later occurrences, the Stalinist accusations in the Trotskyite show trials of the 1930s. Nor are 
they inconsistent with the Gruzenberg case. On the other hand, the only known direct link between 
Trotsky and international banking is through his cousin Abram Givatovzo, who was a private 
banker in Kiev before the Russian Revolution and in Stockholm after the revolution. While 
Givatovzo professed antibolshevism, he was in fact acting in behalf of the Soviets in 1918 in 
currency transactions.— 

Is it possible an international web (:an be spun from these events? First there's Trotsky, a Russian 
internationalist revolutionary with German connections who sparks assistance from two supposed 
supporters of Prince Lvov's government in Russia (Aleinikoff and Wolf, Russians resident in New 
York). These two ignite the action of a liberal Canadian deputy postmaster general, who in turn 
intercedes with a prominent British Army major general on the Canadian military staff. These are 
all verifiable links. 

In brief, allegiances may not always be what they are called, or appear. We can, however, surmise 
that Trotsky, Aleinikoff, Wolf, Coulter, and Gwatkin in acting for a common limited objective also 
had some common higher goal than national allegiance or political label. To emphasize, there is no 
absolute proof that this is so. It is, at the moment, only a logical supposition from the facts. A 
loyalty higher than that forged by a common immediate goal need have been no more than that of 
friendship, although that strains the imagination when we ponder such a polyglot combination. It 
may also have been promoted by other motives. The picture is yet incomplete. 


'Leon Trotsky, My Life (New York: Scribner's, 1930), chap. 22. 

2 Joseph Nedava, Trotsky and the Jews (Philadelphia: Jewish Publication Society of 

America, 1972), p. 163. 

• • • 

United States, Senate, Brewing and Liquor Interests and German and Bolshevik 
Propaganda (Subcommittee on the Judiciary), 65th Cong., 1919. 

Special Report No. 5, The Russian Soviet Bureau in the United States, July 14, 1919, 
Scotland House, London S.W.I. Copy in U.S. State Dept. Decimal File, 316-23-1 145. 

5 New York Times, March 5, 1917. 

6 Lewis Corey, House of Morgan: A Social Biography of the Masters of Money (New York: 
G. W. Watt, 1930). 

7 Morris Hillquit. (formerly Hillkowitz) had been defense attorney for Johann Most, alter the 
assassination of President McKinley, and in 1917 was a leader of the New York Socialist 
Party. In the 1920s Hillquit established himself in the New York banking world by 
becoming a director of, and attorney for, the International Union Bank. Under President 
Franklin D. Roosevelt, Hillquit helped draw up the NRA codes for the garment industry. 

*New York Times, March 16, 1917. 

9 U.S. State Dept. Decimal File, 316-85-1002. 

10 Ibid. 

"ibid., 861.111/315. 

1 9 

Lincoln Steffens, Autobiography (New York: Harcourt, Brace, 1931), p. 764. Steffens was 
the "go-between" for Crane and Woodrow Wilson. 

13 William Edward Dodd, Ambassador Dodd's Diary, 1933-1938 (New York: Harcourt, 
Brace, 1941), pp. 42-43. 

14 Lincoln Steffens, The Letters of Lincoln Steffens (New York: Harcourt, Brace, 1941), p. 


U.S. State Dept. Decimal File, 861.00/1026. 

16 This section is based on Canadian government records. 

17 Gwatkin's memoramada in the Canadian government files are not signed, but initialed with 
a cryptic mark or symbol. The mark has been identified as Gwatkin's because one Gwatkin 
letter (that o[ April 21) with that cryptic mark was acknowledged. 

18 H.J. Morgan, Canadian Men and Women of the Times, 1912, 2 vols. (Toronto: W. Briggs, 

19 June 1919, pp. 66a-666. Toronto Public Library has a copy; the issue of MacLean's in 
which Colonel MacLean's article appeared is not easy to find and a frill summary is 
provided below. 

20 See also Trotsky, My Life, p. 236. 

2 ' See Appendix 3 . 

• • • 

22 According to his own account, Trotsky did not arrive in the U.S. until January 1917. 
Trotsky's real name was Bronstein; he invented the name "Trotsky." "Bronstein" is German 
and "Trotsky" is Polish rather than Russian. His first name is usually given as "Leon"; 
however, Trotsky's first book, which was published in Geneva, has the initial "N," not "L." 

23 See Appendix 3 ; this document was obtained in 1971 from the British Foreign Office but 
apparently was known to MacLean. 

24 U.S. State Dept. Decimal File, 861.00/1351. 

25 U.S. State Dept. Decimal File, 861.00/1341. 

Report of Court Proceedings in the Case of the Anti-Soviet "Bloc of Rightists and 
Trots kyites" Heard Before the Military Collegium of the Supreme Court of the USSR 
(Moscow: People's Commissariat of Justice of the USSR, 1938), p. 293. 

27 See p. 174. Thomas Lamont of the Morgans was an early supporter of Mussolini. 

28 Seep. 122. 

• • • 

Chapter III 


It was not until the Bolsheviks had received from us a steady flow of funds through 
various channels and under varying labels that they were in a position to be able to 
build up their main organ Pravda, to conduct energetic propaganda and appreciably to 
extend the originally narrow base of their party. 

Von Kuhlmann, minister of foreign affairs, to the kaiser, December 3, 1917 

In April 1917 Lenin and a party of 32 Russian revolutionaries, mostly Bolsheviks, journeyed by 
train from Switzerland across Germany through Sweden to Petrograd, Russia. They were on their 
way to join Leon Trotsky to "complete the revolution." Their trans-Germany transit was approved, 
facilitated, and financed by the German General Staff. Lenin's transit to Russia was part of a plan 
approved by the German Supreme Command, apparently not immediately known to the kaiser, to 
aid in the disintegration of the Russian army and so eliminate Russia from World War I. The 
possibility that the Bolsheviks might be turned against Germany and Europe did not occur to the 
German General Staff. Major General Hoffman has written, "We neither knew nor foresaw the 
danger to humanity from the consequences of this journey of the Bolsheviks to Russia." 1 

At the highest level the German political officer who approved Lenin's journey to Russia was 
Chancellor Theobald von Bethmann-Hollweg, a descendant of the Frankfurt banking family 
Bethmann, which achieved great prosperity in the nineteenth century. Bethmann-Hollweg was 
appointed chancellor in 1909 and in November 1913 became the subject of the first vote of censure 
ever passed by the German Reichstag on a chancellor. It was Bethmann-Hollweg who in 1914 told 
the world that the German guarantee to Belgium was a mere "scrap of paper." Yet on other war 
matters — such as the use of unrestricted submarine warfare — Bethmann-Hollweg was 
ambivalent; in January 1917 he told the kaiser, "I can give Your Majesty neither my assent to the 
unrestricted submarine warfare nor my refusal." By 1917 Bethmann-Hollweg had lost the 
Reichstag's support and resigned — but not before approving transit of Bolshevik revolutionaries to 
Russia. The transit instructions from Bethmann-Hollweg went through the state secretary Arthur 
Zimmermann — who was immediately under Bethmann-Hollweg and who handled day-to-day 
operational details with the German ministers in both Bern and Copenhagen — to the German 
minister to Bern in early April 1917. The kaiser himself was not aware of the revolutionary 
movement until after Lenin had passed into Russia. 

While Lenin himself did not know the precise source of the assistance, he certainly knew that the 
German government was providing some funding. There were, however, intermediate links between 
the German foreign ministry and Lenin, as the following shows: 


Final decision BETHMANN-HOLLWEG 



(State Secretary) 


(German Minister in 


• • • 

(alias PARVUS) 


(alias GANETSKY) 
LENIN, in Switzerland 

From Berlin Zimmermann and Bethmann-Hollweg communicated with the German minister in 
Copenhagen, Brockdorff-Rantzau. In turn, Brockdorff-Rantzau was in touch with Alexander Israel 
Helphand (more commonly known by his alias, Parvus), who was located in Copenhagen.- Parvus 
was the connection to Jacob Furstenberg, a Pole descended from a wealthy family but better known 
by his alias, Ganetsky. And Jacob Furstenberg was the immediate link to Lenin. 

Although Chancellor Bethmann-Hollweg was the final authority for Lenin's transfer, and although 
Lenin was probably aware of the German origins of the assistance, Lenin cannot be termed a 
German agent. The German Foreign Ministry assessed Lenin's probable actions in Russia as being 
consistent with their own objectives in the dissolution of the existing power structure in Russia. Yet 
both parties also had hidden objectives: Germany wanted priority access to the postwar markets in 
Russia, and Lenin intended to establish a Marxist dictatorship. 

The idea of using Russian revolutionaries in this way can be traced back to 1915. On August 14 of 
that year, Brockdorff-Rantzau wrote the German state undersecretary about a conversation with 
Helphand (Parvus), and made a strong recommendation to employ Helphand, "an extraordinarily 
important man whose unusual powers I feel we must employ for duration of the war .... "- Included 
in the report was a warning: "It might perhaps be risky to want to use the powers ranged behind 
Helphand, but it would certainly be an admission of our own weakness if we were to refuse their 
services out of fear of not being able to direct them."- 

Brockdorff-Rantzau's ideas of directing or controlling the revolutionaries parallel, as we shall see, 
those of the Wall Street financiers. It was J.P. Morgan and the American International Corporation 
that attempted to control both domestic and foreign revolutionaries in the United States for their 
own purposes. 

A subsequent document- outlined the terms demanded by Lenin, of which the most interesting was 
point number seven, which allowed "Russian troops to move into India"; this suggested that Lenin 
intended to continue the tsarist expansionist program. Zeman also records the role of Max Warburg 
in establishing a Russian publishing house and adverts to an agreement dated August 12, 1916, in 
which the German industrialist Stinnes agreed to contribute two million rubles for financing a 
publishing house in Russia.- 

Consequently, on April 16, 1917, a trainload of thirty-two, including Lenin, his wife Nadezhda 
Krupskaya, Grigori Zinoviev, Sokolnikov, and Karl Radek, left the Central Station in Bern en route 
to Stockholm. When the party reached the Russian frontier only Fritz Plattan and Radek were 
denied entrance into Russia. The remainder of the party was allowed to enter. Several months later 
they were followed by almost 200 Mensheviks, including Martov and Axelrod. 

It is worth noting that Trotsky, at that time in New York, also had funds traceable to German 
sources. Further, Von Kuhlmann alludes to Lenin's inability to broaden the base of his Bolshevik 
party until the Germans supplied funds. Trotsky was a Menshevik who turned Bolshevik only in 
1917. This suggests that German funds were perhaps related to Trotsky's change of party label. 

• • • 


In early 1918 Edgar Sisson, the Petrograd representative of the U.S. Committee on Public 
Information, bought a batch of Russian documents purporting to prove that Trotsky, Lenin, and the 
other Bolshevik revolutionaries were not only in the pay of, but also agents of, the German 

These documents, later dubbed the "Sisson Documents," were shipped to the United States in great 
haste and secrecy. In Washington, D.C. they were submitted to the National Board for Historical 
Service for authentication. Two prominent historians, J. Franklin Jameson and Samuel N. Harper, 
testified to their genuineness. These historians divided the Sisson papers into three groups. 
Regarding Group I, they concluded: 

We have subjected them with great care to all the applicable tests to which historical 
students are accustomed and . . . upon the basis of these investigations, we have no 
hesitation in declaring that we see no reason to doubt the genuineness or authenticity of 
these fifty-three documents. - 

The historians were less confident about material in Group II. This group was not rejected as. 
outright forgeries, but it was suggested that they were copies of original documents. Although the 
historians made "no confident declaration" on Group III, they were not prepared to reject the 
documents as outright forgeries. 

The Sisson Documents were published by the Committee on Public Information, whose chairman 
was George Creel, a former contributor to the pro-Bolshevik Masses. The American press in 
general accepted the documents as authentic. The notable exception was the New York Evening 
Post, at that time owned by Thomas W. Lamont, a partner in the Morgan firm. When only a few 
installments had been published, the Post challenged the authenticity of all the documents. - 

We now know that the Sisson Documents were almost all forgeries: only one or two of the minor 
German circulars were genuine. Even casual examination of the German letterhead suggests that the 
forgers were unusually careless forgers perhaps working for the gullible American market. The 
German text was strewn with terms verging on the ridiculous: for example, Bureau instead of the 
German word Biiro; Central for the German Zentral; etc. 

That the documents are forgeries is the conclusion of an exhaustive study by George Kennan- and 
of studies made in the 1920s by the British government. Some documents were based on authentic 
information and, as Kennan observes, those who forged them certainly had access to some 
unusually good information. For example, Documents 1, 54, 61, and 67 mention that the Nya 
Banken in Stockholm served as the conduit for Bolshevik funds from Germany. This conduit has 
been confirmed in more reliable sources. Documents 54, 63, and 64 mention Furstenberg as the 
banker-intermediary between the Germans and the Bolshevists; Furstenberg's name appears 
elsewhere in authentic documents. Sisson's Document 54 mentions Olof Aschberg, and Olof 
Aschberg by his own statements was the "Bolshevik Banker." Aschberg in 1917 was the director of 
Nya Banken. Other documents in the Sisson series list names and institutions, such as the German 
Naptha-Industrial Bank, the Disconto Gesellschaft, and Max Warburg, the Hamburg banker, but 
hard supportive evidence is more elusive. In general, the Sisson Documents, while themselves 
outright forgeries, are nonetheless based partly on generally authentic information. 

One puzzling aspect in the light of the story in this book is that the documents came to Edgar Sisson 
from Alexander Gumberg (alias Berg, real name Michael Gruzenberg), the Bolshevik agent in 
Scandinavia and later a confidential assistant to Chase National Bank and Floyd Odium of Atlas 
Corporation. The Bolshevists, on the other hand, stridently repudiated the Sisson material. So did 

John Reed, the American representative on the executive of the Third International and whose 

• • • 

paycheck came from Metropolitan magazine, which was owned by J.P. Morgan interests.— So did 
Thomas Lamont, the Morgan partner who owned the New York Evening Post. There are several 
possible explanations. Probably the connections between the Morgan interests in New York and 
such agents as John Reed and Alexander Gumberg were highly flexible. This could have been a 
Gumberg maneuver to discredit Sisson and Creel by planting forged documents; or perhaps 
Gumberg was working in his own interest. 

The Sisson Documents "prove" exclusive German involvement with the Bolsheviks. They also have 
been used to "prove" a Jewish-Bolshevik conspiracy theory along the lines of that of the Protocols 
of Zion. In 1918 the U.S. government wanted to unite American opinion behind an unpopular war 
with Germany, and the Sisson Documents dramatically "proved" the exclusive complicity of 
Germany with the Bolshevists. The documents also provided a smoke screen against public 
knowledge of the events to be described in this book. 


A review of documents in the State Department Decimal File suggests that the State Department 
and Ambassador Francis in Petrograd were quite well informed about the intentions and progress of 
the Bolshevik movement. In the summer of 1917, for example, the State Department wanted to stop 
the departure from the U.S. of "injurious persons" (that is, returning Russian revolutionaries) but 
was unable to do so because they were using new Russian and American passports. The 
preparations for the Bolshevik Revolution itself were well known at least six weeks before it came 
about. One report in the State Department files states, in regard to the Kerensky forces, that it was 
"doubtful whether government . . . [can] suppress outbreak." Disintegration of the Kerensky 
government was reported throughout September and October as were Bolshevik preparations for a 
coup. The British government warned British residents in Russia to leave at least six weeks before 
the Bolshevik phase of the revolution. 

The first full report of the events of early November reached Washington on December 9, 1917. 
This report described the low-key nature of the revolution itself, mentioned that General William V. 
Judson had made an unauthorized visit to Trotsky, and pointed out the presence of Germans in 
Smolny — the Soviet headquarters. 

On November 28, 1917, President Woodrow Wilson ordered no interference with the Bolshevik 
Revolution. This instruction was apparently in response to a request by Ambassador Francis for an 
Allied conference, to which Britain had already agreed. The State Department argued that such a 
conference was impractical. There were discussions in Paris between the Allies and Colonel 
Edward M. House, who reported these to Woodrow Wilson as "long and frequent discussions on 
Russia." Regarding such a conference, House stated that England was "passively willing," France 
"^differently against," and Italy "actively so." Woodrow Wilson, shortly thereafter, approved a 
cable authored by Secretary of State Robert Lansing, which provided financial assistance for the 
Kaledin movement (December 12, 1917). There were also rumors filtering into Washington that 
"monarchists working with the Bolsheviks and same supported by various occurrences and 
circumstances"; that the Smolny government was absolutely under control of the German General 
Staff; and rumors elsewhere that "many or most of them [that is, Bolshevists] are from America." 

In December, General Judson again visited Trotsky; this was looked upon as a step towards 

recognition by the U.S., although a report dated February 5, 1918, from Ambassador Francis to 

Washington, recommended against recognition. A memorandum originating with Basil Miles in 

Washington argued that "we should deal with all authorities in Russia including Bolsheviks." And 

on February 15, 1918, the State Department cabled Ambassador Francis in Petrograd, stating that 

the "department desires you gradually to keep in somewhat closer and informal touch with the 

Bolshevik authorities using such channels as will avoid any official recognition." 

• • • 

The next day Secretary of State Lansing conveyed the following to the French ambassador J. J. 
Jusserand in Washington: "It is considered inadvisable to take any action which will antagonize at 
this time any of the various elements of the people which now control the power in Russia .... "— 

On February 20, Ambassador Francis cabled Washington to report the approaching end of the 
Bolshevik government. Two weeks later, on March 7, 1918, Arthur Bullard reported to Colonel 
House that German money was subsidizing the Bolsheviks and that this subsidy was more 
substantial than previously thought. Arthur Bullard (of the U.S. Committee on Public Information) 
argued: "we ought to be ready to help any honest national government. But men or money or 
equipment sent to the present rulers of Russia will be used against Russians at least as much as 
against Germans."— 

This was followed by another message from Bullard to Colonel House: "I strongly advise against 
giving material help to the present Russian government. Sinister elements in Soviets seem to be 
gaining control." 

But there were influential counterforces at work. As early as November 28, 1917, Colonel House 
cabled President Woodrow Wilson from Paris that it was "exceedingly important" that U.S. 
newspaper comments advocating that "Russia should be treated as an enemy" be "suppressed." 
Then next month William Franklin Sands, executive secretary of the Morgan-controlled American 
International Corporation and a friend of the previously mentioned Basil Miles, submitted a 
memorandum that described Lenin and Trotsky as appealing to the masses and that urged the U.S. 
to recognize Russia. Even American socialist Walling complained to the Department of State about 
the pro-Soviet attitude of George Creel (of the U.S. Committee on Public Information), Herbert 
Swope, and William Boyce Thompson (of the Federal Reserve Bank of New York). 

On December 17, 1917, there appeared in a Moscow newspaper an attack on Red Cross colonel 
Raymond Robins and Thompson, alleging a link between the Russian Revolution and American 

Why are they so interested in enlightenment? Why was the money given the socialist 
revolutionaries and not to the constitutional democrats? One would suppose the latter nearer 
and dearer to hearts of bankers. 

The article goes on to argue that this was because American capital viewed Russia as a future 
market and thus wanted to get a firm foothold. The money was given to the revolutionaries because 

the backward working men and peasants trust the social revolutionaries. At the time when 
the money was passed the social revolutionaries were in power and it was supposed they 
would remain in control in Russia for some time. 

Another report, dated December 12, 1917, and relating to Raymond Robins, details "negotiation 
with a group of American bankers of the American Red Cross Mission"; the "negotiation" related to 
a payment of two million dollars. On January 22, 1918, Robert L Owen, chairman of the U.S. 
Senate Committee on Banking and Currency and linked to Wall Street interests, sent a letter to 
Woodrow Wilson recommending de facto recognition of Russia, permission for a shipload of goods 
urgently needed in Russia, the appointment of representatives to Russia to offset German influence, 
and the establishment of a career-service group in Russia. 

This approach was consistently aided by Raymond Robins in Russia. For example, on February 15, 
1918, a cable from Robins in Petrograd to Davison in the Red Cross in Washington (and to be 
forwarded to William Boyce Thompson) argued that support be given to the Bolshevik authority for 
as long as possible, and that the new revolutionary Russia will turn to the United States as it has 
"broken with the German imperialism." According to Robins, the Bolsheviks wanted United States 


assistance and cooperation together with railroad reorganization, because "by generous assistance 
and technical advice in reorganizing commerce and industry America may entirely exclude German 
commerce during balance of war." 

In brief, the tug-of-war in Washington reflected a struggle between, on one side, old-line diplomats 
(such as Ambassador Francis) and lower-level departmental officials, and, on the other, financiers 
like Robins, Thompson, and Sands with allies such as Lansing and Miles in the State Department 
and Senator Owen in the Congress. 


'Max Hoffman, War Diaries and Other Papers (London: M. Seeker, 1929), 2:177. 

2 Z. A. B. Zeman and W. B. Scharlau, The Merchant of Revolution.. The Life of Alexander 
Israel Helphand (Parvus), 1867-1924 (New York: Oxford University Press, 1965). 

Z. A. B. Zeman, Germany and the Revolution in Russia, 1915-1918. Documents from the 
Archives of the German Foreign Ministry (London: Oxford University Press, 1958), p. 

4 Ibid. 

5 Ibid., p. 6, doc. 6, reporting a conversation with the Fstonian intermediary Keskula. 

6 Ibid.,p. 92, n. 3. 

7 U.S., Committee on Public Information, The German-Bolshevik Conspiracy, War 
Information Series, no. 20, October 1918. 

8 New York Evening Post, September 16-18, 21; October 4, 1918. It is also interesting, but 
not conclusive of anything, that the Bolsheviks also stoutly questioned the authenticity of 
the documents. 

9 George F. Kennan, "The Sisson Documents," Journal of Modern History 27-28 (1955-56): 

10 John Reed, The Sisson Documents (New York: Liberator Publishing, n.d.). 

"This part is based on section 861.00 o[ the U.S. State Dept. Decimal File, also available as 
National Archives rolls 10 and 1 1 of microcopy 316. 

U.S. State Dept. Decimal File, 861.00/1 117a. The same message was conveyed to the 
Italian ambassador. 


See Arthur Bullard papers at Princeton University. 

• • • 

Chapter IV 


What you Radicals and we who hold opposing views differ about, is not so much the 
end as the means, not so much what should be brought about as how it should, and 
can, be brought about .... 

Otto H. Kahn, director, American International Corp., and partner, Kuhn, Loeb & Co., 
speaking to the League/or Industrial Democracy, New York, December 30, 1924 

Before World War I, the financial and business structure of the United States was dominated by two 
conglomerates: Standard Oil, or the Rockefeller enterprise, and the Morgan complex of 
industries — finance and transportation companies. Rockefeller and Morgan trust alliances 
dominated not only Wall Street but, through interlocking directorships, almost the entire economic 
fabric of the United States.- Rockefeller interests monopolized the petroleum and allied industries, 
and controlled the copper trust, the smelters trust, and the gigantic tobacco trust, in addition to 
having influence in some Morgan properties such as the U.S. Steel Corporation as well as in 
hundreds of smaller industrial trusts, public service operations, railroads, and banking institutions. 
National City Bank was the largest of the banks influenced by Standard Oil-Rockefeller, but 
financial control extended to the United States Trust Company and Hanover National Bank as well 
as to major life insurance companies — Equitable Life and Mutual of New York. 

The great Morgan enterprises were in steel, shipping, and the electrical industry; they included 
General Electric, the rubber trust, and railroads. Like Rockefeller, Morgan controlled financial 
corporations — the National Bank of Commerce and the Chase National Bank, New York Life 
Insurance, and the Guaranty Trust Company. The names J.P. Morgan and Guaranty Trust Company 
occur repeatedly throughout this book. In the early part of the twentieth century the Guaranty Trust 
Company was dominated by the Harriman interests. When the elder Harriman (Edward Henry) died 
in 1909, Morgan and associates bought into Guaranty Trust as well as into Mutual Life and New 
York Life. In 1919 Morgan also bought control of Equitable Life, and the Guaranty Trust Company 
absorbed an additional six lesser trust companies. Therefore, at the end of World War I the 
Guaranty Trust and Bankers Trust were, respectively, the first and second largest trust companies in 
the United States, both dominated by Morgan interests.- 

American financiers associated with these groups were involved in financing revolution even before 
1917. Intervention by the Wall Street law firm of Sullivan & Cromwell into the Panama Canal 
controversy is recorded in 1913 congressional hearings. The episode is summarized by 
Congressman Rainey: 

It is my contention that the representatives of this Government [United States] made 
possible the revolution on the isthmus of Panama. That had it not been for the interference 
of this Government a successful revolution could not possibly have occurred, and I contend 
that this Government violated the treaty of 1846. 1 will be able to produce evidence to show 
that the declaration of independence which was promulgated in Panama on the 3rd day of 
November, 1903, was prepared right here in New York City and carried down there — 
prepared in the office of Wilson (sic) Nelson Cromwell ....- 

Congressman Rainey went on to state that only ten or twelve of the top Panamanian revolutionists 
plus "the officers of the Panama Railroad & Steamship Co., who were under the control of William 
Nelson Cromwell, of New York and the State Department officials in Washington," knew about the 

• • • 

impending revolution.- The purpose of the revolution was to deprive Colombia, of which Panama 
was then a part, of $40 million and to acquire control of the Panama Canal. 

The best-documented example of Wall Street intervention in revolution is the operation of a New 
York syndicate in the Chinese revolution of 1912, which was led by Sun Yat-sen. Although the 
final gains of the syndicate remain unclear, the intention and role of the New York financing group 
are fully documented down to amounts of money, information on affiliated Chinese secret societies, 
and shipping lists of armaments to be purchased. The New York bankers syndicate for the Sun Yat- 
sen revolution included Charles B. Hill, an attorney with the law firm of Hunt, Hill & Betts. In 1912 
the firm was located at 165 Broadway, New York, but in 1917 it moved to 120 Broadway (see 
chapter eight for the significance of this address). Charles B. Hill was director of several 
Westinghouse subsidiaries, including Bryant Electric, Perkins Electric Switch, and Westinghouse 
Lamp — all affiliated with Westinghouse Electric whose New York office was also located at 120 
Broadway. Charles R. Crane, organizer of Westinghouse subsidiaries in Russia, had a known role in 
the first and second phases of the Bolshevik Revolution (see page 26). 

The work of the 1910 Hill syndicate in China is recorded in the Laurence Boothe Papers at the 
Hoover Institution.- These papers contain over 110 related items, including letters of Sun Yat-sen to 
and from his American backers. In return for financial support, Sun Yat-sen promised the Hill 
syndicate railroad, banking, and commercial concessions in the new revolutionary China. 

Another case of revolution supported by New York financial institutions concerned that of Mexico 
in 1915-16. Von Rintelen, a German espionage agent in the United States,- was accused during his 
May 1917 trial in New York City of attempting to "embroil" the U.S. with Mexico and Japan in 
order to divert ammunition then flowing to the Allies in Europe.- Payment for the ammunition that 
was shipped from the United States to the Mexican revolutionary Pancho Villa, was made through 
Guaranty Trust Company. Von Rintelen's adviser, Sommerfeld, paid $380,000 via Guaranty Trust 
and Mississippi Valley Trust Company to the Western Cartridge Company of Alton, Illinois, for 
ammunition shipped to El Paso, for forwarding to Villa. This was in mid- 1915. On January 10, 
1916, Villa murdered seventeen American miners at Santa Isabel and on March 9, 1916, Villa 
raided Columbus, New Mexico, and killed eighteen more Americans. 

Wall Street involvement in these Mexican border raids was the subject of a letter (October 6, 1916) 
from Lincoln Steffens, an American Communist, to Colonel House, an aide' to Woodrow Wilson: 

My dear Colonel House: 

Just before I left New York last Monday, I was told convincingly that "Wall Street" had 
completed arrangements for one more raid of Mexican bandits into the United States: to be 
so timed and so atrocious that it would settle the election ... - 

Once in power in Mexico, the Carranza government purchased additional arms in the United States. 
The American Gun Company contracted to ship 5,000 Mausers and a shipment license was issued 
by the War Trade Board for 15,000 guns and 15,000,000 rounds of ammunition. The American 
ambassador to Mexico, Fletcher, "flatly refused to recommend or sanction the shipment of any 
munitions, rifles, etc., to Carranza."- However, intervention by Secretary of State Robert Lansing 
reduced the barrier to one of a temporary delay, and "in a short while . . . [the American Gun 
Company] would be permitted to make the shipment and deliver."— 

The raids upon the U.S. by the Villa and the Carranza forces were reported in the New York Times 
as the "Texas Revolution" (a kind of dry run for the Bolshevik Revolution) and were undertaken 
jointly by Germans and Bolsheviks. The testimony of John A. Walls, district attorney of 
Brownsville, Texas, before the 1919 Fall Committee yielded documentary evidence of the link 
between Bolshevik interests in the United States, German activity, and the Carranza forces in 


Mexico.— Consequently, the Carranza government, the first in the world with a Soviet-type 
constitution (which was written by Trotskyites), was a government with support on Wall Street. The 
Carranza revolution probably could not have succeeded without American munitions and Carranza 
would not have remained in power as long as he did without American help.— 

Similar intervention in the 1917 Bolshevik Revolution in Russia revolves around Swedish banker 
and intermediary Olof Aschberg. Logically the story begins with prerevolutionary tsarist loans by 
Wall Street bank syndicates. 


In August 1914 Europe went to war. Under international law neutral countries (and the United 
States was neutral until April 1917) could not raise loans for belligerent countries. This was a 
question of law as well as morality. 

When the Morgan house floated war loans for Britain and France in 1915, J.P. Morgan argued that 
these were not war loans at all but merely a means of facilitating international trade. Such a 
distinction had indeed been elaborately made by President Wilson in October 1914; he explained 
that the sale of bonds in the U.S. for foreign governments was in effect a loan of savings to 
belligerent governments and did not finance a war. On the other hand, acceptance of Treasury notes 
or other evidence of debt in payment for articles was only a means of facilitating trade and not of 
financing a war effort.— 

Documents in the State Department files demonstrate that the National City Bank, controlled by 
Stillman and Rockefeller interests, and the Guaranty Trust, controlled by Morgan interests, jointly 
raised substantial loans for the belligerent Russia before U.S. entry into the war, and that these loans 
were raised alter the State Department pointed out to these firms that they were contrary to 
international law. Further, negotiations for the loans were undertaken through official U.S. 
government communications facilities under cover of the top-level "Green Cipher" of the State 
Department. Below are extracts from State Department cables that will make the case. 

On May 94, 1916, Ambassador Francis in Petrograd sent the following cable to the State 
Department in Washington for forwardin to Frank Arthur Vanderlip, then chairman of the National 
City Bank in New York. The cable was sent in Green Cipher and was enciphered and deciphered by 
U.S. State Department officers in Petrograd and Washington at the taxpayers' expense (file 

563, May 94, 1 p.m. 

For Vanderlip National City Bank New York. Five. Our previous opinions credit 
strengthened. We endorse plan cabled as safe investment plus very attractive speculation in 
roubles. In view of guarantee of exchange rate have placed rate somewhat above present 
market. Owing unfavorable opinion created by long delay have on own responsibility 
offered take twenty-five million dollars. We think large portion of all should be retained by 
bank and allied institutions. With clause respect customs bonds become practical lien on 
more than one hundred and fifty million dollars per annum customs making absolute 
security and secures market even if defect. We consider three [years?] option on bonds very 
valuable and for that reason amount of rouble credit should be enlarged by group or by 
distribution to close friends. American International should take block and we would inform 
Government. Think group should be formed at once to take and issue of bonds . . . should 
secure full cooperation guaranty. Suggest you see Jack personally, use every endeavor to get 
them really work otherwise cooperate guarantee form new group. Opportunities here during 
the next ten years very great along state and industrial financiering and if this transaction 


consummated doubtless should be established. In answering bear in mind situation 
regarding cable. 

MacRoberts Rich. 


There are several points to note about the above cable to understand the story that follows. First, 
note the reference to American International Corporation, a Morgan firm, and a name that turns up 
again and again in this story. Second, "guarantee" refers to Guaranty Trust Company. Third, 
"MacRoberts" was Samuel MacRoberts, a vice president and the executive manager of National 
City Bank. 

On May 24, 1916, Ambassador Francis cabled a message from Rolph Marsh of Guaranty Trust in 
Petrograd to Guaranty Trust in New York, again in the special Green Cipher and again using the 
facilities of the State Department. This cable reads as follows: 

565, May 24, 6 p.m. 

for Guaranty Trust Company New York: 


Olof and self consider the new proposition takes care Olof and will help rather than harm 
your prestige. Situation such co-operation necessary if big things are to be accomplished 
here. Strongly urge your arranging with City to consider and act jointly in all big 
propositions here. Decided advantages for both and prevents playing one against other. City 
representatives here desire (hand written) such co-operation. Proposition being considered 
eliminates our credit in name also option but we both consider the rouble credit with the 
bond option in propositions. Second paragraph offers wonderful profitable opportunity, 
strongly urge your acceptance. Please cable me full authority to act in connection with City. 
Consider our entertaining proposition satisfactory situation for us and permits doing big 
things. Again strongly urge your taking twenty-five million of rouble credit. No possibility 
loss and decided speculative advantages. Again urge having Vice President upon the ground. 
Effect here will be decidedly good. Resident Attorney does not carry same prestige and 
weight. This goes through Embassy by code answer same way. See cable on possibilities. 





Entire Message in Green Cipher. 

"Olof ' in the cable was Olof Aschberg, Swedish banker and head of the Nya Banken in Stockholm. 
Aschberg had been in New York in 1915 conferring with the Morgan firm on these Russian loans. 
Now, in 1916, he was in Petrograd with Rolph Marsh of Guaranty Trust and Samuel MacRoberts 
and Rich of National City Bank ("City" in cable) arranging loans for a Morgan-Rockefeller 
consortium. The following year, Aschberg, as we shall see later, would be known as the "Bolshevik 
Banker," and his own memoirs reproduce evidence of his right to the title. 

• • • 

The State Department files also contain a series of cables between Ambassador Francis, Acting 
Secretary Frank Polk, and Secretary of State Robert Lansing concerning the legality and propriety 
of transmitting National City Bank and Guaranty Trust cables at public expense. On May 25, 1916, 
Ambassador Francis cabled Washington as follows and referred to the two previous cables: 

569, May 25, one p.m. 

My telegram 563 and 565 May twenty-fourth are sent for local representatives of institutions 
addressed in the hope of consummating loan which would largely increase international 
trade and greatly benefit [diplomatic relations?]. Prospect for success promising. Petrograd 
representatives consider terms submitted very satisfactory but fear such representations to 
their institutions would prevent consummation loan if Government here acquainted these 


The basic reason cited by Francis for facilitating the cables is "the hope of consummating loan 
which would largely increase international trade." Transmission of commercial messages using 
State Department facilities had been prohibited, and on June 1, 1916, Polk cabled Francis: 


In view of Department's regulation contained in its circular telegraphic instruction of March 
fifteenth, (discontinuance of forwarding Commercial messages)— 1915, please explain why 
messages in your 563, 565 and 575, should be communicated. 

Hereafter please follow closely Department's instructions. 




Then on June 8, 1916, Secretary of State Lansing expanded the prohibition and clearly stated that 
the proposed loans were illegal: 

860 Your 563, 565, May 24, g: 569 May 25.1 pm Before delivering messages to Vanderlip 
and Guaranty Trust Company, I must inquire whether they refer to Russian Government 
loans of any description. If they do, I regret that the Department can not be a party to their 
transmission, as such action would submit it to justifiable criticism because of participation 
by this Government in loan transaction by a belligerent for the purpose of carrying on its 
hostile operations. Such participation is contrary to the accepted rule of international law 
that neutral Governments should not lend their assistance to the raising of war loans by 

The last line of the Lansing cable as written, was not transmitted to Petrograd. The line read: 
"Cannot arrangements be made to send these messages through Russian channels?" 

How can we assess these cables and the parties involved? 

• • • 

Clearly the Morgan-Rockefeller interests were not interested in abiding by international law. There 
is obvious intent in these cables to supply loans to belligerents. There was no hesitation on the part 
of these firms to use State Department facilities for the negotiations. Further, in spite of protests, the 
State Department allowed the messages to go through. Finally, and most interesting for subsequent 
events, Olof Aschberg, the Swedish banker, was a prominent participant and intermediary in the 
negotiations on behalf of Guaranty Trust. Let us therefore take a closer look at Olof Aschberg. 


Olof Aschberg, the "Bolshevik Banker" (or "Bankier der Weltrevolution," as he has been called in 
the German press), was owner of the Nya Banken, founded 1912 in Stockholm. His codirectors 
included prominent members of Swedish cooperatives and Swedish socialists, including G. W. 
Dahl, K. G. Rosling, and C. Gerhard Magnusson.— In 1918 Nya Banken was placed on the Allied 
black-list for its financial operations in behalf of Germany. In response to the blacklisting, Nya 
Banken changed its name to Svensk Ekonomiebolaget. The bank remained under the control of 
Aschberg, and was mainly owned by him. The bank's London agent was the British Bank of North 
Commerce, whose chairman was Earl Grey, former associate of Cecil Rhodes. Others in Aschberg's 
interesting circle of business associates included Krassin, who was until the Bolshevik Revolution 
(when he changed color to emerge as a leading Bolshevik) Russian manager of Siemens-Schukert in 
Petrograd; Carl Furstenberg, minister of finance in the first Bolshevik government; and Max May, 
vice president in charge of foreign operations for Guaranty Trust of New York. Olof Aschberg 
thought so highly of Max May that a photograph of May is included in Aschberg's book.— 

In the summer of 1916 Olof Aschberg was in New York representing both Nya Banken and Pierre 
Bark, the tsarist minister of finance. Aschberg's prime business in New York, according to the New 
York Times (August 4, 1916), was to negotiate a $50 million loan for Russia with an American 
banking syndicate headed by Stillman's National City Bank. This business was concluded on June 
5, 1916; the results were a Russian credit of $50 million in New York at a bank charge of 7 1/2 
percent per annum, and a corresponding 150-million-ruble credit for the NCB syndicate in Russia. 
The New York syndicate then turned around and issued 6 1/2 percent certificates in its own name in 
the U.S. market to the amount of $50 million. Thus, the NCB syndicate made a profit on the $50 
million loan to Russia, floated it on the American market for another profit, and obtained a 150- 
million-ruble credit in Russia. 

During his New York visit on behalf of the tsarist Russian government, Aschberg made some 
prophetic comments concerning the future for America in Russia: 

The opening for American capital and American initiative, with the awakening brought by 
the war, will be country-wide when the struggle is over. There are now many Americans in 
Petrograd, representatives of business firms, keeping in touch with the situation, and as soon 
as the change comes a huge American trade with Russia should spring up.— 


While this tsarist loan operation was being floated in New York, Nya Banken and Olof Aschberg 
were funneling funds from the German government to Russian revolutionaries, who would 
eventually bring down the "Kerensky committee" and establish the Bolshevik regime. 

The evidence for Olof Aschberg's intimate connection with financing the Bolshevik Revolution 
comes from several sources, some of greater value than others. The Nya Banken and Olof Aschberg 
are prominently cited in the Sisson papers (see chapter three); however, George Kennan has 
systematically analyzed these papers and shown them to be forged, although they are probably 


based in part on authentic material. Other evidence originates with Colonel B. V. Nikitine, in charge 
of counterintelligence in the Kerensky government, and consists of twenty-nine telegrams 
transmitted from Stockholm to Petrograd, and vice versa, regarding financing of the Bolsheviks. 
Three of these telegrams refer to banks — telegrams 10 and 11 refer to Nya Banken, and telegram 
14 refers to the Russo-Asiatic Bank in Petrograd. Telegram 10 reads as follows: 

Gisa Furstenberg Saltsjobaden. Funds very low cannot assist if really urgent give 500 as last 
payment pencils huge loss original hopeless instruct Nya Banken cable further 100 thousand 

Telegram 1 1 reads: 

Kozlovsky Sergievskaya 81. First letters received Nya Banken telegraphed cable who 
Soloman offering local telegraphic agency refers to Bronck Savelievich Avilov. 

Furstenberg was the intermediary between Parvus (Alexander I. Helphand) and the German 
government. About these transfers, Michael Futrell concludes: 

It was discovered that during the last few months she [Evegeniya Sumenson] had received 
nearly a million rubles from Furstenberg through the Nya Banken in Stockholm, and that 
this money came from German sources.— 

Telegram 14 of the Nikitine series reads: "Furstenberg Saltsjobaden. Number 90 period hundred 
thousand into Russo-Asiatic Sumenson." The U.S. representative for Russo-Asiatic was MacGregor 
Grant Company at 120 Broadway, New York City, and the bank was financed by Guaranty Trust in 
the U.S. and Nya Banken in Sweden. 

Another mention of the Nya Banken is in the material "The Charges Against the Bolsheviks," which 
was published in the Kerensky period. Particularly noteworthy in that material is a document signed 
by Gregory Alexinsky, a former member of the Second State Duma, in reference to monetary 
transfers to the Bolsheviks. The document, in part, reads as follows: 

In accordance with the information just received these trusted persons in Stockholm were: 
the Bolshevik Jacob Furstenberg, better known under the name of "Hanecki" (Ganetskii), 
and Parvus (Dr. Helfand); in Petrograd: the Bolshevik attorney, M. U. Kozlovsky, a woman 
relative of Hanecki — Sumenson, engaged in speculation together with Hanecki, and others. 
Kozlovsky is the chief receiver of German money, which is transferred from Berlin through 
the "Disconto-Gesellschaft" to the Stockholm "Via Bank," and thence to the Siberian Bank 
in Petrograd, where his account at present has a balance of over 2,000,000 rubles. The 
military censorship has unearthed an uninterrupted exchange of telegrams of a political and 
financial nature between the German agents and Bolshevik leaders [Stockholm-Petrograd].— 

Further, there is in the State Dept. files a Green Cipher message from the U.S. embassy in 
Christiania (named Oslo, 1925), Norway, dated February 21, 1918, that reads: "Am informed that 
Bolshevik funds are deposited in Nya Banken, Stockholm, Legation Stockholm advised. 

Finally, Michael Furtell, who interviewed Olof Aschberg just before his death, concludes that 
Bolshevik funds were indeed transferred from Germany through Nya Banken and Jacob 
Furstenberg in the guise of payment for goods shipped. According to Futrell, Aschberg confirmed 
to him that Furstenberg had a commercial business with Nya Banken and that Furstenberg had also 
sent funds to Petrograd. These statements are authenticated in Aschberg's memoirs (see page 70). In 
sum, Aschberg, through his Nya Banken, was undoubtedly a channel for funds used in the 
Bolshevik Revolution, and Guaranty Trust was indirectly linked through its association with 


Aschberg and its interest in MacGregor Grant Co., New York, agent of the Russo-Asiatic Bank, 
another transfer vehicle. 


Several years later, in the fall of 1922, the Soviets formed their first international bank. It was based 
on a syndicate that involved the former Russian private bankers and some new investment from 
German, Swedish, American, and British bankers. Known as the Ruskombank (Foreign 
Commercial Bank or the Bank of Foreign Commerce), it was headed by Olof Aschberg; its board 
consisted of tsarist private bankers, representatives of German, Swedish, and American banks, and, 
of course, representatives of the Soviet Union. The U.S. Stockholm legation reported to Washington 
on this question and noted, in a reference to Aschberg, that "his reputation is poor. He was referred 
to in Document 54 of the Sisson documents and Dispatch No. 138 of January 4, 1921 from a 
legation in Copenhagen."— 

The foreign banking consortium involved in the Ruskombank represented mainly British capital. It 
included Russo-Asiatic Consolidated Limited, which was one of the largest private creditors of 
Russia, and which was granted £3 million by the Soviets to compensate for damage to its properties 
in the Soviet Union by nationalization. The British government itself had already purchased 
substantial interests in the Russian private banks; according to a State Department report, "The 
British Government is heavily invested in the consortium in question."— 

The consortium was granted extensive concessions in Russia and the bank had a share capital often 
million gold rubles. A report in the Danish newspaper National Titende stated that "possibilities 
have been created for cooperation with the Soviet government where this, by political negotiations, 
would have been impossible."— In other words, as the newspaper goes on to say, the politicians had 
failed to achieve cooperation with the Soviets, but "it may be taken for granted that the capitalistic 
exploitation of Russia is beginning to assume more definite forms."— 

In early October 1922 Olof Aschberg met in Berlin with Emil Wittenberg, director of the 
Nationalbank fur Deutschland, and Scheinmann, head of the Russian State Bank. After discussions 
concerning German involvement in the Ruskombank, the three bankers went to Stockholm and 
there met with Max May, vice president of the Guaranty Trust Company. Max May was then 
designated director of the Foreign Division of the Ruskombank, in addition to Schlesinger, former 
head of the Moscow Merchant Bank; Kalaschkin, former head of the Junker Bank; and Ternoffsky, 
former head of the Siberian Bank. The last bank had been partly purchased by the British 
government in 1918. Professor Gustav Cassell of Sweden agreed to act as adviser to Ruskombank. 
Cassell was quoted in a Swedish newspaper (Svenskadagbladet of October 17, 1922) as follows: 

That a bank has now been started in Russia to take care of purely banking matters is a great 
step forward, and it seems to me that this bank was established in order to do something to 
create a new economic life in Russia. What Russia needs is a bank to create internal and 
external commerce. If there is to be any business between Russia and other countries there 
must be a bank to handle it. This step forward should be supported in every way by other 
countries, and when I was asked my advice I stated that I was prepared to give it. I am not in 
favor of a negative policy and believe that every opportunity should be seized to help in a 
positive reconstruction. The great question is how to bring the Russian exchange back to 
normal. It is a complicated question and will necessitate thorough investigation. To solve 
this problem I am naturally more than willing to take part in the work. To leave Russia to 
her own resources and her own fate is folly.— 

The former Siberian Bank building in Petrograd was used as the head office of the Ruskombank, 
whose objectives were to raise short-term loans in foreign countries, to introduce foreign capital 


into the Soviet Union, and generally to facilitate Russian overseas trade. It opened on December 1, 
1922, in Moscow and employed about 300 persons. 

In Sweden Ruskombank was represented by the Svenska Ekonomibolaget of Stockholm, Olof 
Aschberg's Nya Banken under a new name, and in Germany by the Garantie und Creditbank fur 
Den Osten of Berlin. In the United States the bank was represented by the Guaranty Trust Company 
of New York. On opening the bank, Olof Aschberg commented: 

The new bank will look after the purchasing of machinery and raw material from England 
and the United States and it will give guarantees for the completion of contracts. The 
question of purchases in Sweden has not yet arisen, but it is hoped that such will be the case 
later on.— 

On joining Ruskombank, Max May of Guaranty Trust made a similar statement: 

The United States, being a rich country with well developed industries, does not need to 
import anything from foreign countries, but... it is greatly interested in exporting its products 
to other countries and considers Russia the most suitable market for that purpose, taking into 
consideration the vast requirements of Russia in all lines of its economic life.— 

May stated that the Russian Commercial Bank was "very important" and that it would "largely 
finance all lines of Russian industries." 

From the very beginning the operations of the Ruskombank were restricted by the Soviet foreign- 
trade monopoly. The bank had difficulties in obtaining advances on Russian goods deposited 
abroad. Because they were transmitted in the name of Soviet trade delegations, a great deal of 
Ruskombank funds were locked up in deposits with the Russian State Bank. Finally, in early 1924 
the Russian Commercial Bank was fused with the Soviet foreign-trade commissariat, and Olof 
Aschberg was dismissed from his position at the bank because, it was claimed in Moscow, he had 
misused bank funds. His original connection with the bank was because of his friendship with 
Maxim Litvinov. Through this association, so runs a State Department report, Olof Aschberg had 
access to large sums of money for the purpose of meeting payments on goods ordered by Soviets in 

These sums apparently were placed in the Ekonomibolaget, a private banking company, 
owned by Mr. Aschberg. It is now alledged [sic] that a large portion of these funds were 
employed by Mr. Aschberg for making investments for his personal account and that he is 
now endeavoring to maintain his position in the bank through his possession of this money. 
According to my informant Mr. Aschberg has not been the sole one to profit by his 
operations with the Soviet funds, but has divided the gains with those who are responsible 
for his appointment in the Russian Commerce Bank, among them being Litvinoff— 

Ruskombank then became Vneshtorg, by which it is known today. 

We now have to retrace our steps and look at the activities of Aschberg's New York associate, 
Guaranty Trust Company, during World War I, to lay the foundation for examination of its role in 
the revolutionary era in Russia. 

1917 22 

During World War I Germany raised considerable funds in New York for espionage and covert 
operations in North America and South America. It is important to record the flow of these funds 


because it runs from the same firms — Guaranty Trust and American International Corporation — 
that were involved in the Bolshevik Revolution and its aftermath. Not to mention the fact (outlined 
in chapter three) that the German government also financed Lenin's revolutionary activities. 

A summary of the loans granted by American banks to German interests in World War I was given 
to the 1919 Overman Committee of the United States Senate by U.S. Military Intelligence. The 
summary was based on the deposition of Karl Heynen, who came to the United States in April 1915 
to assist Dr. Albert with the commercial and financial affairs of the German government. Heynen's 
official work was the transportation of goods from the United States to Germany by way of 
Sweden, Switzerland, and Holland. In fact, he was up to his ears in covert operations. 

The major German loans raised in the United States between 1915 and 1918, according to Heynen, 
were as follows: The first loan, of $400,000, was made about September 1914 by the investment 
bankers Kuhn, Loeb & Co. Collateral of 25 million marks was deposited with Max M. Warburg in 
Hamburg, the German affiliate of Kuhn, Loeb & Co. Captain George B. Lester of U.S. Military 
Intelligence told the Senate that Heynen's reply to the question "Why did you go to Kuhn, Loeb & 
Co?" was, "Kuhn, Loeb & Co. we considered the natural bankers of the German government and 
the Reichsbank." 

The second loan, of $1.3 million, did not come directly from the United States but was negotiated 
by John Simon, an agent of the Suedeutsche Disconto-Gesellschaft, to secure funds for making 
shipments to Germany. 

The third loan was from the Chase National Bank (in the Morgan group) in the amount of three 
million dollars. The fourth loan was from the Mechanics and Metals National Bank in the amount 
of one million dollars. These loans financed German espionage activities in the United States and 
Mexico. Some funds were traced to Sommerfeld, who was an adviser to Von Rintelen (another 
German espionage agent) and who was later associated with Hjalmar Schacht and Emil Wittenberg. 
Sommerfeld was to purchase ammunition for use in Mexico. He had an account with the Guaranty 
Trust Company and from this payments were made to Western Cartridge Co. of Alton, Illinois, for 
ammunition that was shipped to El Paso for use in Mexico by Pancho Villa's bandits. About 
$400,000 was expended on ammunition, Mexican propaganda, and similar activities. 

The then German ambassador Count Von Bernstorff has recounted his friendship with Adolph von 
Pavenstedt, a senior partner of Amsinck & Co., which was controlled and in November 1917 owned 
by American International Corporation. American International figures prominently in later 
chapters; its board of directors contained the key names on Wall Street: Rockefeller, Kahn, 
Stillman, du Pont, Winthrop, etc. According to Von Bernstorff, Von Pavenstedt was "intimately 
acquainted with all the members of the Embassy."— Von Bernstorff himself regarded Von 
Pavenstedt as one of the most respected, "if not the most respected imperial German in New 
York."— Indeed, Von Pavenstedt was "for many years a Chief pay master of the German spy system 
in this country."— In other words, there is no question that Armsinck & Co., controlled by American 
International Corporation, was intimately associated with the funding of German wartime espionage 
in the United States. To clinch Von Bernstorff s last statement, there exists a photograph of a check 
in favor of Amsinck & Co., dated December 8, 1917 — just four weeks after the start of the 
Bolshevik Revolution in Russia — signed Von Papen (another German espionage operator), and 
having a counterfoil bearing the notation "travelling expenses on Von W [i.e., Von Wedell]." 
French Strothers,— who published the photograph, has stated that this check is evidence that Von 
Papen "became an accessory after the fact to a crime against American laws"; it also makes 
Amsinck & Co. subject to a similar charge. 

Paul Bolo-Pasha, yet another German espionage agent, and a prominent French financier formerly 
in the service of the Egyptian government, arrived in New York in March 1916 with a letter of 

introduction to Von Pavenstedt. Through the latter, Bolo-Pasha met Hugo Schmidt, director of the 

• • • 

Deutsche Bank in Berlin and its representative in the United States. One of Bolo-Pasha's projects 
was to purchase foreign newspapers so as to slant their editorials in favor of Germany. Funds for 
this program were arranged in Berlin in the form of credit with Guaranty Trust Company, with the 
credit subsequently made available to Amsinck & Co. Adolph von Pavenstedt, of Amsinck, in turn 
made the funds available to Bolo-Pasha. 

In other words, both Guaranty Trust Company and Amsinck & Co., a subsidiary of American 
International Corporation, were directly involved in the implementation of German espionage and 
other activities in the United States. Some links can be established from these firms to each of the 
major German operators in the U.S. — Dr. Albert, Karl Heynen, Von Rintelen, Von Papan, Count 
Jacques Minotto (see below), and Paul Bolo-Pasha. 

In 1919 the Senate Overman Committee also established that Guaranty Trust had an active role in 
financing German World War I efforts in an "unneutral" manner. The testimony of the U.S. 
intelligence officer Becker makes this clear: 

In this mission Hugo Schmidt [of Deutsche Bank] was very largely assisted by certain 
American banking institutions. It was while we were neutral, but they acted to the detriment 
of the British interests, and I have considerable data on the activity of the Guaranty Trust 
Co. in that respect, and would like to know whether the committee wishes me to go into it. 

SENATOR NELSON: That is a branch of the City Bank, is it not? 


SENATOR OVERMAN: If it was inimical to British interests it was unneutral, and I think 
you had better let it come out. 

SENATOR KING: Was it an ordinary banking transaction? 

MR. BECKER: That would be a matter of opinion. It has to do with camouflaging exchange 
so as to make it appear to be neutral exchange, when it was really German exchange on 
London. As a result of those operations in which the Guaranty Trust Co. mainly participated 
between August 1, 1914, and the time America entered the war, the Deutsche Banke in its 
branches in South America succeeded in negotiating £4,670,000 of London exchange in war 

SENATOR OVERMAN: I think that is competent 


What is really important is not so much that financial assistance was given to Germany, which was 
only illegal, as that directors of Guaranty Trust were financially assisting the Allies at the same 
time. In other words, Guaranty Trust was financing both sides of The conflict. This raises the 
question of morality. 


Count Jacques Minotto is a most unlikely but verifiable and persistent thread that links the 
Bolshevik Revolution in Russia with German banks, German World War I espionage in the United 
States, the Guaranty Trust Company in New York, the abortive French Bolshevik revolution, and 
the related Caillaux-Malvy espionage trials in France. 

Jacques Minotto was born February 17, 1891, in Berlin, the son of an Austrian father descended 

from Italian nobility, and a German mother. Young Minotto was educated in Berlin and then 

• • • 

entered employment with the Deutsche Bank in Berlin in 1912. Almost immediately Minotto was 
sent to the United States as assistant to Hugo Schmidt, deputy director of the Deutsche Bank and its 
New York representative. After a year in New York, Minotto was sent by the Deutsche Bank to 
London, where he circulated in prominent political and diplomatic circles. At the outbreak of World 
War I, Minotto returned to the United States and immediately met with the German ambassador 
Count Von Bernstorff, after which he entered the employ of Guaranty Trust Company in New 
York. At Guaranty Trust, Minotto was under the direct orders of Max May, director of its foreign 
department and an associate of Swedish banker Olof Aschberg. Minotto was no minor bank official. 
The interrogatories of the Caillaux trials in Paris in 1919 established that Minotto worked directly 
under Max May.— On October 25, 1914, Guaranty Trust sent Jacques Minotto to South America to 
make a report on the political, financial, and commercial situation. As he did in London, 
Washington, and New York, so Minotto moved in the highest diplomatic and political circles here. 
One purpose of Minotto's mission in Latin America was to establish the mechanism by which 
Guaranty Trust could be used as an intermediary for the previously mentioned German fund raising 
on the London money market, which was then denied to Germany because of World War I. Minotto 
returned to the United States, renewed his association with Count Von Bernstorff and Count 
Luxberg, and subsequently, in 1916, attempted to obtain a position with U.S. Naval Intelligence. 
After this he was arrested on charges of pro-German activities. When arrested Minotto was working 
at the Chicago plant of his father-in-law Louis Swift, of Swift & Co., meatpackers. Swift put up the 
security for the $50,000 bond required to free Minotto, who was represented by Henry Veeder, the 
Swift & Co. attorney. Louis Swift was himself arrested for pro-German activities at a later date. As 
an interesting and not unimportant coincidence, "Major" Harold H. Swift, brother of Louis Swift, 
was a member of the William Boyce Thompson 1917 Red Cross Mission to Petrograd — that is, 
one of the group of Wall Street lawyers and businessmen whose intimate connections with the 
Russian Revolution are to be described later. Helen Swift Neilson, sister of Louis and Harold Swift, 
was later connected with the pro-Communist Abraham Lincoln Center "Unity." This established a 
minor link between German banks, American, banks, German espionage, and, as we shall see later, 
the Bolshevik Revolution.— 

Joseph Caillaux was a famous (sometimes called notorious) French politician. He was also 
associated with Count Minotto in the latter's Latin America operations for Guaranty Trust, and was 
later implicated in the famous French espionage cases of 1919, which had Bolshevik connections. 
In 1911, Caillaux became minister of finance and later in the same year became premier of France. 
John Louis Malvy became undersecretary of state in the Caillaux government. Several years later 
Madame Caillaux murdered Gaston Calmette, editor of the prominent Paris newspaper Figaro. The 
prosecution charged that Madame Caillaux murdered Calmette to prevent publication of certain 
compromising documents. This affair resulted in the departure of Caillaux and his wife from 
France. The couple went to Latin America and there met with Count Minotto, the agent of the 
Guaranty Trust Company who was in Latin America to establish intermediaries for German finance. 
Count Minotto was socially connected with the Caillaux couple in Rio de Janeiro and Sao Paulo, 
Brazil, in Montevideo, Uruguay, and in Buenos Aires, Argentina. In other words, Count Minotto 
was a constant companion of the Caillaux couple while they were in Latin America.— On returning 
to France, Caillaux and his wife stayed at Biarritz as guests of Paul Bolo-Pasha, who was, as we 
have seen, also a German espionage operator in the United States and France.— Later, in July 1915, 
Count Minotto arrived in France from Italy, met with the Caillaux couple; the same year the 
Caillaux couple also visited Bolo-Pasha again in Biarritz. In other words, in 1915 and 1916 Caillaux 
established a continuing social relationship with Count Minotto and Bolo-Pasha, both of whom 
were German espionage agents in the United States. 

Bolo-Pasha's work in France was to gain influence for Germany in the Paris newspapers Le Temps 
and Figaro. Bolo-Pasha then went to New York, arriving February 24, 1916. Here he was to 
negotiate a loan of $2 million — and here he was associated with Von Pavenstedt, the prominent 
German agent with Amsinck & Co.— Severance Johnson, in The Enemy Within, has connected 
Caillaux and Malvy to the 1918 abortive French Bolshevik revolution, and states that if the 


revolution had succeeded, "Malvy would have been the Trotsky of France had Caillaux been its 
Lenin."— Caillaux and Malvy formed a radical socialist party in France using German funds and 
were brought to trial for these subversive efforts. The court interrogatories in the 1919 French 
espionage trials introduce testimony concerning New York bankers and their relationship with these 
German espionage operators. They also set forth the links between Count Minotto and Caillaux, as 
well as the relationship of the Guaranty Trust Company to the Deutsche Bank and the cooperation 
between Hugo Schmidt of Deutsche Bank and Max May of Guaranty Trust Company. The French 
interrogatory (page 940) has the following extract from the New York deposition of Count Minotto 
(page 10, and retranslated from the French): 

QUESTION: Under whose orders were you at Guaranty Trust? 

REPLY: Under the orders of Mr. Max May. 

QUESTION: He was a Vice President? 

ANSWER: He was Vice President and Director of the Foreign Department. 

Later, in 1922, Max May became a director of the Soviet Ruskom-bank and represented the 
interests of Guaranty Trust in that bank. The French interrogatory establishes that Count Minotto, a 
German espionage agent, was in the employ of Guaranty Trust Company; that Max May was his 
superior officer; and that Max May was also closely associated with Bolshevik banker Olof 
Aschberg. In brief: Max May of Guaranty Trust was linked to illegal fund raising and German 
espionage in the United States during World War I; he was linked indirectly to the Bolshevik 
Revolution and directly to the establishment of Ruskombank, the first international bank in the 
Soviet Union. 

It is too early to attempt an explanation for this seemingly inconsistent, illegal, and sometimes 
immoral international activity. In general, there are two plausible explanations: the first, a relentless 
search for profits; the second — which agrees with the words of Otto Kahn of Kuhn, Loeb & Co. 
and of American International Corporation in the epigraph to this chapter — the realization of 
socialist aims, aims which "should, and can, be brought about" by nonsocialist means. 


'John Moody, The Truth about the Trusts (New York: Moody Publishing, 1904). 

2 The J. P. Morgan Company was originally founded in London as George Peabody and Co. 
in 1838. It was not incorporated until March 21, 1940. The company ceased to exist in April 
1954 when it merged with the Guaranty Trust Company, then its most important 
commercial bank subsidiary, and is today known as the Morgan Guarantee Trust Company 
of New York. 

3 United States, House, Committee on Foreign Affairs, The Story of Panama, Hearings on 
the Rainey Resolution, 1913. p. 53. 

4 Ibid., p. 60. 

5 Stanford, Calif. See also the Los Angeles Times, October 13, 1966. 

6 Later codirector with Hjalmar Schacht (Hitler's banker) and Emil Wittenberg, of the 

Nationalbank fur Deutschland. 

• • • 

7 United States, Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, 

8 Lincoln Steffens, The Letters of Lincoln Steffens (New York: Harcourt, Brace, 1941, 1:386 

9 U.S., Senate, Committee on Foreign Relations, Investigation of Mexican Affairs, 1920, pts. 
2, 18, p. 681. 

10 Ibid. 

11 New York Times, January 23, 1919. 

U.S., Senate, Committee on Foreign Relations, op. cit, pp. 795-96. 

U.S., Senate, Hearings Before the Special Committee Investigating the Munitions Industry, 
73-74th Cong., 1934-37, pt. 25, p. 7666. 

14 U.S. State Dept. Decimal File, 861.51/110 (316-116-682). 

15 U.S. State Dept. Decimal File, 861.51/112. 

16 US. State Dept. Decimal File, 861.51/111. 

17 Handwritten in parentheses. 

18 01of Aschberg, En Vandrande Jude Fran Glasbruksgatan (Stockholm: Albert Bonniers 
Forlag, n.d.), pp. 98-99, which is included in Memoarer (Stockholm: Albert Bonniers 
Forlag, 1946). See also Gastboken (Stockholm: Tidens Forlag, 1955) for further material on 

19 Aschberg, p. 123. 

20 New York Times, August 4, 1916. 

2 'Michael Futrell, Northern Underground (London: Faber and Faber, 1963), p. 162. 

22 See Robert Paul Browder and Alexander F. Kerensky, The Russian Provisional 
government, 1917 (Stanford, Calif: Stanford University Perss, 1961), 3: 1365. "Via Bank" 
is obviously Nya Banken. 

23 U.S. State Dept. Decimal File, 861.00/1130. 

24 U.S. State Dept. Decimal File, 861.516/129, August 28, 1922. A State Dept. report from 
Stockholm, dated October 9, 1922 (861.516/137), states in regard to Aschberg, "I met Mr. 
Aschberg some weeks ago and in the conversation with him he substantially stated all that 
appeared in this report. He also asked me to inquire whether he could visit the United States 
and gave as references some of the prominent banks. In connection with this, however, I 
desire to call the department's attention to Document 54 of the Sisson Documents, and also 
to many other dispatches which this legation wrote concerning this man during the war, 
whose reputation and standing is not good. He is undoubtedly working closely in connection 
with the Soviets, and during the entire war he was in close cooperation with the Germans" 
(U.S. State Dept. Decimal File, 861.516/137, Stockholm, October 9, 1922. The report was 
signed by Ira N. Morris). 

• • • 

25 Ibid., 861.516/130, September 13, 1922. 

26 Ibid. 

27 Ibid. 

28 Ibid., 861.516/140, Stockholm, October 23, 1922. 

29 Ibid., 861.516/147, December 8, 1922. 

30 Ibid., 861.516/144, November 18, 1922. 

31 Ibid., 861.316/197, Stockholm, March 7, 1924. 

32 This section is based on the Overman Committee hearings, U.S., Senate, Brewing and 
Liquor Interests and German and Bolshevik Propaganda, Hearings before the 
Subcommittee on the Judiciary, 65th Cong., 1919, 2:2154-74. 


Count Von Bernstorff, My Three Years in America (New York: Scribner's, 1920), p. 261. 

34 Ibid. 

35 Ibid. 

36 French Strothers, Fighting Germany's Spies (Garden City, N.Y.: Doubleday, Page, 1918), 
p. 152. 

37 U.S., Senate, Overman Committee, 2:2009. 

38 This section is based on the following sources (as well as those cited elsewhere): Jean 
Bardanne, Le Colonel Nicolai: espion de genie (Paris: Editions Siboney, n.d.); Cours de 
Justice, Affaire Caillaux, Loustalot et Comby: Procedure Generate Interrogatoires (Paris, 
1919), pp. 349-50, 937-46; Paul Vergnet, L' Affaire Caillaux (Paris 1918), especially the 
chapter titled "Marx de Mannheim"; Henri Guernut, Emile Kahn, and Camille M. 
Lemercier, Etudes documentaires sur L'Affaire Caillaux (Paris, n.d.), pp. 1012-15; and 
George Adam, Treason and Tragedy: An Account of French War Trials (London: Jonathan 
Cape, 1929). 

39 See p. 70. 

40 This Interrelationship is dealt with extensively in the three-volume Overman Committee 
report of 1919. See bibliography. 

41 See Rudolph Binion, Defeated Leaders (New York: Columbia University Press, 1960). 

George Adam, Treason and Tragedy: An Account of French War Trials (London: 
Jonathan Cape, 1929). 

43 Ibid. 

44 77ze Enemy Within (London: George Allen & Unwin, 1920). 


• • • 


Chapter V 


Poor Mr. Billings believed he was in charge of a scientific mission for the relief of 
Russia .... He was in reality nothing but a mask — the Red Cross complexion of the 
mission was nothing but a mask. 

Cornelius Kelleher, assistant to William Boyce Thompson (in George F. Kennan, Russia 
Leaves the War) 

The Wall Street project in Russia in 1917 used the Red Cross Mission as its operational vehicle. 
Both Guaranty Trust and National City Bank had representatives in Russia at the time of the 
revolution. Frederick M. Corse of the National City Bank branch in Petrograd was attached to the 
American Red Cross Mission, of which a great deal will be said later. Guaranty Trust was 
represented by Henry Crosby Emery. Emery was temporarily held by the Germans in 1918 and then 
moved on to represent Guaranty Trust 'in China. 

Up to about 1915 the most influential person in the American Red Cross National Headquarters in 
Washington, D.C. was Miss Mabel Boardman. An active and energetic promoter, Miss Boardman 
had been the moving force behind the Red Cross enterprise, although its endowment came from 
wealthy and prominent persons including J. P. Morgan, Mrs. E. H. Harriman, Cleveland H. Dodge, 
and Mrs. Russell Sage. The 1910 fund-raising campaign for $2 million, for example, was successful 
only because it was supported by these wealthy residents of New York City. In fact, most of the 
money came from New York City. J.P. Morgan himself contributed $100,000 and seven other 
contributors in New York City amassed $300,000. Only one person outside New York City 
contributed over $10,000 and that was William J. Boardman, Miss Boardman's father. Henry P. 
Davison was chairman of the 1910 New York Fund-Raising Committee and later became chairman 
of the War Council of the American Red Cross. In other words, in World War I the Red Cross 
depended heavily on Wall Street, and specifically on the Morgan firm. 

The Red Cross was unable to cope with the demands of World War I and in effect was taken over 
by these New York bankers. According to John Foster Dulles, these businessmen "viewed the 
American Red Cross as a virtual arm of government, they envisaged making an incalculable 
contribution to the winning of the war."- In so doing they made a mockery of the Red Cross motto: 
"Neutrality and Humanity." 

In exchange for raising funds, Wall Street asked for the Red Cross War Council; and on the 
recommendation of Cleveland H. Dodge, one of Woodrow Wilson's financial backers, Henry P. 
Davison, a partner in J.P. Morgan Company, became chairman. The list of administrators of the Red 
Cross then began to take on the appearance of the New York Directory of Directors: John D. Ryan, 
president of Anaconda Copper Company (see frontispiece); George W. Hill, president of the 
American Tobacco Company; Grayson M.P. Murphy, vice president of the Guaranty Trust 
Company; and Ivy Lee, public relations expert for the Rockefellers. Harry Hopkins, later to achieve 
fame under President Roosevelt, became assistant to the general manager of the Red Cross in 
Washington, D.C. 

The question of a Red Cross Mission to Russia came before the third meeting of this reconstructed 
War Council, which was held in the Red Cross Building, Washington, D.C, on Friday, May 29, 
1917, at 11:00 A.M. Chairman Davison was deputed to explore the idea with Alexander Legge of 
the International Harvester Company. Subsequently International Harvester, which had 
considerable interests in Russia, provided $200,000 to assist financing the Russian mission. At a 


later meeting it was made known that William Boyce Thompson, director of the Federal Reserve 
Bank of New York, had "offered to pay the entire expense of the commission"; this offer was 
accepted in a telegram: "Your desire to pay expenses of commission to Russia is very much 
appreciated and from our point of view very important. "- 

The members of the mission received no pay. All expenses were paid by William Boyce Thompson 
and the $200,000 from International Harvester was apparently used in Russia for political subsidies. 
We know from the files of the U.S. embassy in Petrograd that the U.S. Red Cross gave 4,000 rubles 
to Prince Lvoff, president of the Council of Ministers, for "relief of revolutionists" and 10,000 
rubles in two payments to Kerensky for "relief of political refugees." 


In August 1917 the American Red Cross Mission to Russia had only a nominal relationship with the 
American Red Cross, and must truly have been the most unusual Red Cross Mission in history. All 
expenses, including those of the uniforms — the members were all colonels, majors, captains, or 
lieutenants — were paid out of the pocket of William Boyce Thompson. One contemporary 
observer dubbed the all-officer group an "Haytian Army": 

The American Red Cross delegation, about forty Colonels, Majors, Captains and 
Lieutenants, arrived yesterday. It is headed by Colonel (Doctor) Billings of Chicago, and 
includes Colonel William B. Thompson and many doctors and civilians, all with military 
titles; we dubbed the outfit the "Haytian Army" because there were no privates. They have 
come to fill no clearly defined mission, as far as I can find out, in fact Gov. Francis told me 
some time ago that he had urged they not be allowed to come, as there were already too 
many missions from the various allies in Russia. Apparently, this Commission imagined 
there was urgent call for doctors and nurses in Russia; as a matter of fact there is at present a 
surplus of medical talent and nurses, native and foreign in the country and many haft-empty 
hospitals in the large cities.- 

The mission actually comprised only twenty-four (not forty), having military rank from lieutenant 
colonel down to lieutenant, and was supplemented by three orderlies, two motion-picture 
photographers, and two interpreters, without rank. Only five (out of twenty-four) were doctors; in 
addition, there were two medical researchers. The mission arrived by train in Petrograd via Siberia 
in August 1917. The five doctors and orderlies stayed one month, returning to the United States on 
September 1 1 . Dr. Frank Billings, nominal head of the mission and professor of medicine at the 
University of Chicago, was reported to be disgusted with the overtly political activities of the 
majority of the mission. The other medical men were William S. Thayer, professor of medicine at 
Johns Hopkins University; D. J. McCarthy, Fellow of Phipps Institute for Study and Prevention of 
Tuberculosis, at Philadelphia; Henry C. Sherman, professor of food chemistry at Columbia 
University; C. E. A. Winslow, professor of bacteriology and hygiene at Yale Medical School; 
Wilbur E. Post, professor of medicine at Rush Medical College; Dr. Malcolm Grow, of the Medical 
Officers Reserve Corps of the U.S. Army; and Orrin Wightman, professor of clinical medicine, 
New York Polyclinic Hospital. George C. Whipple was listed as professor of sanitary engineering at 
Harvard University but in fact was partner of the New York firm of Hazen, Whipple & Fuller, 
engineering consultants. This is significant because Malcolm Pirnie — of whom more later — was 
listed as an assistant sanitary engineer and employed as an engineer by Hazen, Whipple & Fuller. 

The majority of the mission, as seen from the table, was made up of lawyers, financiers, and their 
assistants, from the New York financial district. The mission was financed by William B. 
Thompson, described in the official Red Cross circular as "Commissioner and Business Manager; 
Director United States Federal Bank of New York." Thompson brought along Cornelius Kelleher, 
described as an attache to the mission but actually secretary to Thompson and with the same 


address — 14 Wall Street, New York City. Publicity for the mission was handled by Henry S. 
Brown, of the same address. Thomas Day Thacher was an attorney with Simpson, Thacher & 
Bartlett, a firm founded by his father, Thomas Thacher, in 1884 and prominently involved in 
railroad reorganization and mergers. Thomas as junior first worked for the family firm, became 
assistant U.S. attorney under Henry L. Stimson, and returned to the family firm in 1909. The young 
Thacher was a close friend of Felix Frankfurter and later became assistant to Raymond Robins, also 
on the Red Cross Mission. In 1925 he was appointed district judge under President Coolidge, 
became solicitor general under Herbert Hoover, and was a director of the William Boyce Thompson 


Members from Wall 

Street financial 


community and their 






Andrews (Liggett & 

Billings (doctor) 

Brooks (orderly) 

Myers Tobacco) 

Barr (Chase National 

Grow (doctor) 

Clark (orderly) 


Brown (c/o William B. 

McCarthy (medical 

Rocchia (orderly) 


research; doctor) 

Cochran (McCann Co.) 

Post (doctor) 

Kelleher (c/o William B. 

Sherman (food chemistry) 

Travis (movies) 


Nicholson (Swirl & Co.) 

Thayer (doctor) 

Wyckoff (movies' 

Pirnie (Hazen, Whipple & 


Redfield (Stetson, 

Wightman (medicine) 

Hardy (justice) 

Jennings & Russell) 

Robins (mining promoter) Winslow (hygiene) 

Swift (Swift & Co.) 

Thacher (Simpson, 
Thacher & Bartlett) 

Thompson (Federal 
Reserve Bank of N.Y.) 

Wardwell (Stetson, 
Jennings & Russell) 

Whipple (Hazen, Whipple 
& Fuller) 

Corse (National City 

Horn (transportation) 

• • • 

Magnuson (recommended 
by confidential agent of 
Colonel Thompson) 

Alan Wardwell, also a deputy commissioner and secretary to the chairman, was a lawyer with the 
law firm of Stetson, Jennings & Russell of 15 Broad Street, New York City, and H. B. Redfield was 
law secretary to Wardwell. Major Wardwell was the son of William Thomas Wardwell, long-time 
treasurer of Standard Oil of New Jersey and Standard Oil of New York. The elder Wardwell was 
one of the signers of the famous Standard Oil trust agreement, a member of the committee to 
organize Red Cross activities in the Spanish American War, and a director of the Greenwich 
Savings Bank. His son Alan was a director not only of Greenwich Savings, but also of Bank of New 
York and Trust Co. and the Georgian Manganese Company (along with W. Averell Harriman, a 
director of Guaranty Trust). In 1917 Alan Wardwell was affiliated with Stetson, Jennings 8c Russell 
and later joined Davis, Polk, Wardwell, Gardner & Read (Frank L. Polk was acting secretary of 
state during the Bolshevik Revolution period). The Senate Overman Committee noted that 
Wardwell was favorable to the Soviet regime although Poole, the State Department official on the 
spot, noted that "Major Wardwell has of all Americans the widest personal knowledge of the terror" 
(316-23-1449). In the 1920s Wardwell became active with the Russian-American Chamber of 
Commerce in promoting Soviet trade objectives. 

The treasurer of the mission was James W. Andrews, auditor of Liggett & Myers Tobacco 
Company of St. Louis. Robert I. Barr, another member, was listed as a deputy commissioner; he 
was a vice president of Chase Securities Company (120 Broadway) and of the Chase National 
Bank. Listed as being in charge of advertising was William Cochran of 61 Broadway, New York 
City. Raymond Robins, a mining promoter, was included as a deputy commissioner and described 
as "a social economist." Finally, the mission included two members of Swift & Company of Union 
Stockyards, Chicago. The Swifts have been previously mentioned as being connected with German 
espionage in the United States during World War I. Harold H. Swift, deputy commissioner, was 
assistant to the vice president of Swift & Company; William G. Nicholson was also with Swift & 
Company, Union Stockyards. 

Two persons were unofficially added to the mission after it arrived in Petrograd: Frederick M. 
Corse, representative of the National City Bank in Petrograd; and Herbert A. Magnuson, who was 
"very highly recommended by John W. Finch, the confidential agent in China of Colonel William 
B. Thompson."- 

The Pirnie papers, deposited at the Hoover Institution, contain primary material on the mission. 
Malcolm Pirnie was an engineer employed by the firm of Hazen, Whipple & Fuller, consulting 
engineers, of 42 Street, New York City. Pirnie was a member of the mission, listed on a manifest as 
an assistant sanitary engineer. George C. Whipple, a partner in the firm, was also included in the 
group. The Pirnie papers include an original telegram from William B. Thompson, inviting assistant 
sanitary engineer Pirnie to meet with him and Henry P. Davison, chairman of the Red Cross War 
Council and partner in the J.P. Morgan firm, before leaving for Russia. The telegram reads as 

WESTERN UNION TELEGRAM New York, June 21,1917 

To Malcolm Pirnie 

I should very much like to have you dine with me at the Metropolitan Club, Sixteenth Street 
and Fifth Avenue New York City at eight o'clock tomorrow Friday evening to meet Mr. H. 
P. Davison. 

• • • 

W. B. Thompson, 14 Wall Street 

The files do not elucidate why Morgan partner Davison and Thompson, director of the Federal 
Reserve Bank — two of the most prominent financial men in New York — wished to have dinner 
with an assistant sanitary engineer about to leave for Russia. Neither do the files explain why 
Davison was subsequently unable to meet Dr. Billings and the commission itself, nor why it was 
necessary to advise Pirnie of his inability to do so. But we may surmise that the official cover of the 
mission — Red Cross activities — was of significantly less interest than the Thompson-Pirnie 
activities, whatever they may have been. We do know that Davison wrote to Dr. Billings on June 
25, 1917: 

Dear Doctor Billings: 

It is a disappointment to me and to my associates on the War Council not have been able to 
meet in a body the members of your Commission .... 

A copy of this letter was also mailed to assistant sanitary engineer Pirnie with a personal letter from 
Morgan banker Henry P. Davison, which read: 

My dear Mr. Pirnie: 

You will, I am sure, entirely understand the reason for the letter to Dr. Billings, copy of 
which is enclosed, and accept it in the spirit in which it is sent .... 

The purpose of Davison's letter to Dr. Billings was to apologize to the commission and Billings for 
being unable to meet with them. We may then be justified in supposing that some deeper 
arrangements were made by Davison and Pirnie concerning the activities of the mission in Russia 
and that these arrangements were known to Thompson. The probable nature of these activities will 
be described later.- 

The American Red Cross Mission (or perhaps we should call it the Wall Street Mission to Russia) 
also employed three Russian-English interpreters: Captain Ilovaisky, a Russian Bolshevik; Boris 
Reinstein, a Russian-American, later secretary to Lenin, and the head of Karl Radek's Bureau of 
International Revolutionary Propaganda, which also employed John Reed and Albert Rhys 
Williams; and Alexander Gumberg (alias Berg, real name Michael Gruzenberg), who was a brother 
of Zorin, a Bolshevik minister. Gumberg was also the chief Bolshevik agent in Scandinavia. He 
later became a confidential assistant to Floyd Odium of Atlas Corporation in the United States as 
well as an adviser to Reeve Schley, a vice president of the Chase Bank. 

It should be asked in passing: How useful were the translations supplied by these interpreters? On 
September 13, 1918, H. A. Doolittle, American vice consul at Stockholm, reported to the secretary 
of state on a conversation with Captain Ilovaisky (who was a "close personal friend" of Colonel 
Robins of the Red Cross Mission) concerning a meeting of the Murman Soviet and the Allies. The 
question of inviting the Allies to land at Murman was under discussion at the Soviet, with Major 
Thacher of the Red Cross Mission acting for the Allies. Ilovaisky interpreted Thacher's views for 
the Soviet. "Ilovaisky spoke at some length in Russian, supposedly translating for Thacher, but in 
reality for Trotsky .... "to the effect that "the United States would never permit such a landing to 
occur and urging the speedy recognition of the Soviets and their politics."- Apparently Thacher 
suspected he was being mistranslated and expressed his indignation. However, "Ilovaisky 
immediately telegraphed the substance to Bolshevik headquarters and through their press bureau 
had it appear in all the papers as emanating from the remarks of Major Thacher and as the general 
opinion of all truly accredited American representatives. "- 

• • • 

Ilovaisky recounted to Maddin Summers, U.S. consul general in Moscow, several instances where 
he (Ilovaisky) and Raymond Robins of the Red Cross Mission had manipulated the Bolshevik press, 
especially "in regard to the recall of the Ambassador, Mr. Francis." He admitted that they had not 
been scrupulous, "but had acted according to their ideas of right, regardless of how they might have 
conflicted with the politics of the accredited American representatives. "- 

This then was the American Red Cross Mission to Russia in 1917. 


In 1917 the American Red Cross also sent a medical assistance mission to Rumania, then fighting 
the Central Powers as an ally of Russia. A comparison of the American Red Cross Mission to 
Russia with that sent to Rumania suggests that the Red Cross Mission based in Petrograd had very 
little official connection with the Red Cross and even less connection with medical assistance. 
Whereas the Red Cross Mission to Rumania valiantly upheld the Red Cross twin principles of 
"humanity" and "neutrality," the Red Cross Mission in Petrograd flagrantly abused both. 

The American Red Cross Mission to Rumania left the United States in July 1917 and located itself 
at Jassy. The mission consisted of thirty persons under Chairman Henry W. Anderson, a lawyer 
from Virginia. Of the thirty, sixteen were either doctors or surgeons. By comparison, out of twenty- 
nine individuals with the Red Cross Mission to Russia, only three were doctors, although another 
four members were from universities and specialized in medically related fields. At the most, seven 
could be classified as doctors with the mission to Russia compared with sixteen with the mission to 
Rumania. There was about the same number of orderlies and nurses with both missions. The 
significant comparison, however, is that the Rumanian mission had only two lawyers, one treasurer, 
and one engineer. The Russian mission had fifteen lawyers and businessmen. None of the 
Rumanian mission lawyers or doctors came from anywhere near the New York area but all, except 
one (an "observer" from the Department of Justice in Washington, D.C.), of the lawyers and 
businessmen with the Russian mission came from that area. Which is to say that more than half the 
total of the Russian mission came from the New York financial district. In other words, the relative 
composition of these missions confirms that the mission to Rumania had a legitimate purpose — to 
practice medicine — while the Russian mission had a non-medical and strictly political objective. 
From its personnel, it could be classified as a commercial or financial mission, but from its actions 
it was a subversive political action group. 








Medical (doctors and 



Orderlies, nurses 



Lawyers and 






• • • 


American Red Cross, Washington, D.C. 

U.S. Department of State, Petrograd embassy, Red Cross file, 1917. 

The Red Cross Mission to Rumania remained at its post in Jassy for the remainder of 1917 and into 
1918. The medical staff of the American Red Cross Mission in Russia — the seven doctors — quit 
in disgust in August 1917, protested the political activities of Colonel Thompson, and returned to 
the United States. Consequently, in September 1917, when the Rumanian mission appealed to 
Petrograd for American doctors and nurses to help out in the near crisis conditions in Jassy, there 
were no American doctors or nurses in Russia available to go to Rumania. 

Whereas the bulk of the mission in Russia occupied its time in internal political maneuvering, the 
mission in Rumania threw itself into relief work as soon as it arrived. On September 17, 1917, a 
confidential cable from Henry W. Anderson, chairman of the Rumania mission, to the American 
ambassador Francis in Petrograd requested immediate and urgent help in the form of $5 million to 
meet an impending catastrophe in Rumania. Then followed a series of letters, cables, and 
communications from Anderson to Francis appealing, unsuccessfully, for help. 

On September 28, 1917, Vopicka, American minister in Rumania, cabled Francis at length, for 
relay to Washington, and repeated Anderson's analysis of the Rumanian crisis and the danger of 
epidemics — and worse — as winter closed in: 

Considerable money and heroic measures required prevent far reaching disaster .... Useless 
try handle situation without someone with authority and access to government . . . With 
proper organization to look after transport receive and distribute supplies. 

The hands of Vopicka and Anderson were tied as all Rumanian supplies and financial transactions 
were handled by the Red Cross Mission in Petrograd — and Thompson and his staff of fifteen Wall 
Street lawyers and businessmen apparently had matters of greater concern that Rumanian Red Cross 
affairs. There is no indication in the Petrograd embassy files at the U.S. State Department that 
Thompson, Robins, or Thacher concerned himself at any time in 1917 or 1918 with the urgent 
situation in Rumania. Communications from Rumania went to Ambassador Francis or to one of his 
embassy staff, and occasionally through the consulate in Moscow. 

By October 1917 the Rumanian situation reached the crisis point. Vopicka cabled Davison in New 
York (via Petrograd) on October 5: 

Most urgent problem here .... Disastrous effect feared .... Could you possibly arrange special 
shipment .... Must rush or too late. 

Then on November 5 Anderson cabled the Petrograd embassy saying that delays in sending help 
had already "cost several thousand lives." On November 13 Anderson cabled Ambassador Francis 
concerning Thompson's lack of interest in Rumanian conditions: 

Requested Thompson furnish details all shipments as received but have not obtained same 
.... Also requested him keep me posted as to transport conditions but received very little 

Anderson then requested that Ambassador Francis intercede on his behalf in order to have funds for 
the Rumanian Red Cross handled in a separate account in London, directly under Anderson and 

removed from the control of Thompson's mission. 

• • • 



What then was the Red Cross Mission doing? Thompson certainly acquired a reputation for opulent 
living in Petrograd, but apparently he undertook only two major projects in Kerensky's Russia: 
support for an American propaganda program and support for the Russian Liberty Loan. Soon after 
arriving in Russia Thompson met with Madame Breshko-Breshkovskaya and David Soskice, 
Kerensky's secretary, and agreed to contribute $2 million to a committee of popular education so 
that it could "have its own press and... engage a staff of lecturers, with cinematograph illustrations" 
(861.00/ 1032); this was for the propaganda purpose of urging Russia to continue in the war against 
Germany. According to Soskice, "a packet of 50,000 rubles" was given to Breshko-Breshkovskaya 
with the statement, "This is for you to expend according to your best judgment." A further 
2,100,000 rubles was deposited into a current bank account. A letter from J. P. Morgan to the State 
Department (861.51/190) confirms that Morgan cabled 425,000 rubles to Thompson at his request 
for the Russian Liberty Loan; J. P. also conveyed the interest of the Morgan firm regarding "the 
wisdom of making an individual subscription through Mr. Thompson" to the Russian Liberty Loan. 
These sums were transmitted through the National City Bank branch in Petrograd. 


Of greater historical significance, however, was the assistance given to the Bolsheviks first by 
Thompson, then, after December 4, 1917, by Raymond Robins. 

Thompson's contribution to the Bolshevik cause was recorded in the contemporary American press. 
The Washington Post of February 2, 1918, carried the following paragraphs: 


W. B. Thompson, Red Cross Donor, Believes Party Misrepresented. New York, Feb. 2 
(1918). William B. Thompson, who was in Petrograd from July until November last, has 
made a personal contribution of $1,000,000 to the Bolsheviki for the purpose of spreading 
their doctrine in Germany and Austria. 

Mr. Thompson had an opportunity to study Russian conditions as head of the American Red 
Cross Mission, expenses of which also were largely defrayed by his personal contributions. 
He believes that the Bolsheviki constitute the greatest power against Pro-Germanism in 
Russia and that their propaganda has been undermining the militarist regimes of the General 

Mr. Thompson deprecates American criticism of the Bolsheviki. He believes they have been 
misrepresented and has made the financial contribution to the cause in the belief that it will 
be money well spent for the future of Russia as well as for the Allied cause. 

Hermann Hagedorn's biography The Magnate: William Boyce Thompson and His Time (1869-1930) 
reproduces a photograph of a cablegram from J.P. Morgan in New York to W. B. Thompson, "Care 
American Red Cross, Hotel Europe, Petrograd." The cable is date-stamped, showing it was received 
at Petrograd "8-Dek 1917" (8 December 1917), and reads: 

New York Y757/5 24W5 Nil — Your cable second received. We have paid National City 
Bank one million dollars as instructed — Morgan. 

• • • 

The National City Bank branch in Petrograd had been exempted from the Bolshevik nationalization 
decree — the only foreign or domestic Russian bank to have been so exempted. Hagedorn says that 
this million dollars paid into Thompson's NCB account was used for "political purposes." 


William B. Thompson left Russia in early December 1917 to return home. He traveled via London, 
where, in company with Thomas Lamont of the J.P. Morgan firm, he visited Prime Minister Lloyd 
George, an episode we pick up in the next chapter. His deputy, Raymond Robins, was left in charge 
of the Red Cross Mission to Russia. The general impression that Colonel Robins presented in the 
subsequent months was not overlooked by the press. In the words of the Russian newspaper 
Russkoe Slovo, Robins "on the one hand represents American labor and on the other hand American 
capital, which is endeavoring through the Soviets to gain their Russian markets."— 

Raymond Robins started life as the manager of a Florida phosphate company commissary. From 
this base he developed a kaolin deposit, then prospected Texas and the Indian territories in the late 
nineteenth century. Moving north to Alaska, Robins made a fortune in the Klondike gold rush. 
Then, for no observable reason, he switched to socialism and the reform movement. By 1912 he 
was an active member of Roosevelt's Progressive Party. He joined the 1917 American Red Cross 
Mission to Russia as a "social economist." 

There is considerable evidence, including Robins' own statements, that his reformist social-good 
appeals were little more than covers for the acquisition of further power and wealth, reminiscent of 
Frederick Howe's suggestions in Confessions of a Monopolist. For example, in February 1918 
Arthur Bullard was in Petrograd with the U.S. Committee on Public Information and engaged in 
writing a long memorandum for Colonel Edward House. This memorandum was given to Robins by 
Bullard for comments and criticism before transmission to House in Washington, D.C. Robins' very 
unsocialistic and imperialistic comments were to the effect that the manuscript was "uncommonly 
discriminating, far-seeing and well done," but that he had one or two reservations — in particular, 
that recognition of the Bolsheviks was long overdue, that it should have been effected immediately, 
and that had the U.S. so recognized the Bolsheviks, "I believe that we would now be in control of 
the surplus resources of Russia and have control officers at all points on the frontier."— 

This desire to gain "control of the surplus resources of Russia" was also obvious to Russians. Does 
this sound like a social reformer in the American Red Cross or a Wall Street mining promoter 
engaged in the practical exercise of imperialism? 

In any event, Robins made no bones about his support for the Bolshevists.— Barely three weeks 
after the Bolshevik phase of the Revolution started, Robins cabled Henry Davison at Red Cross 
headquarters: "Please urge upon the President the necessity of our continued intercourse with the 
Bolshevik Government." Interestingly, this cable was in reply to a cable instructing Robins that the 
"President desires the withholding of direct communications by representatives of the United States 
with the Bolshevik Government."— Several State Department reports complained about the partisan 
nature of Robins' activities. For example, on March 27, 1919, Harris, the American consul at 
Vladivostok, commented on a long conversation he had had with Robins and protested gross 
inaccuracies in the latter's reporting. Harris wrote, "Robins stated to me that no German and 
Austrian prisoners of war had joined the Bolshevik army up to May 1918. Robbins knew this 
statement was absolutely false." Harris then proceeded to provide the details of evidence available 
to Robins. 14 

• • • 

f m /ff fn 


Limit of Area Controlled by Bolsheviks, January 1918 

Harris concluded, "Robbins deliberately misstated facts concerning Russia at that time and he has 
been doing it ever since." 

On returning to the United States in 1918, Robins continued his efforts in behalf of the Bolsheviks. 
When the files of the Soviet Bureau were seized by the Lusk Committee, it was found that Robins 
had had "considerable correspondence" with Ludwig Martens and other members of the bureau. 
One of the more interesting documents seized was a letter from Santeri Nuorteva (alias Alexander 
Nyberg), the first Soviet representative in the U.S., to "Comrade Cahan," editor of the New York 
Daily Forward. The letter called on the party faithful to prepare the way for Raymond Robins: 

(To Daily) FORWARD 
Dear Comrade Cahan: 

July 6, 1918 

It is of the utmost importance that the Socialist press set up a clamor immediately that Col. 
Raymond Robins, who has just returned from Russia at the head of the Red Cross Mission, 
should be heard from in a public report to the American people. The armed intervention 
danger has greatly increased. The reactionists are using the Czecho-Slovak adventure to 

• • • 

bring about invasion. Robins has all the facts about this and about the situation in Russia 
generally. He takes our point of view. 

I am enclosing copy of Call editorial which shows a general line of argument, also some 
facts about Czecho-Slovaks. 


PS&AU Santeri Nuorteva 


Unknown to its administrators, the Red Cross has been used from time to time as a vehicle or cover 
for revolutionary activities. The use of Red Cross markings for unauthorized purposes is not 
uncommon. When Tsar Nicholas was moved from Petrograd to Tobolsk allegedly for his safety 
(although this direction was towards danger rather than safety), the train carried Japanese Red Cross 
placards. The State Department files contain examples of revolutionary activity under cover of Red 
Cross activities. For example, a Russian Red Cross official (Chelgajnov) was arrested in Holland in 
1919 for revolutionary acts (316-21-107). During the Hungarian Bolshevik revolution in 1918, led 
by Bela Kun, Russian members of the Red Cross (or revolutionaries operating as members of the 
Russian Red Cross) were found in Vienna and Budapest. In 1919 the U.S. ambassador in London 
cabled Washington startling news; through the British government he had learned that "several 
Americans who had arrived in this country in the uniform of the Red Cross and who stated that they 
were Bolsheviks . . . were proceeding through France to Switzerland to spread Bolshevik 
propaganda." The ambassador noted that about 400 American Red Cross people had arrived in 
London in November and December 1918; of that number one quarter returned to the United States 
and "the remainder insisted on proceeding to France." There was a later report on January 15, 1918, 
to the effect that an editor of a labor newspaper in London had been approached on three different 
occasions by three different American Red Cross officials who offered to take commissions to 
Bolsheviks in Germany. The editor had suggested to the U.S. embassy that it watch American Red 
Cross personnel. The U.S. State Department took these reports seriously and Polk cabled for names, 
stating, "If true, I consider it of the greatest importance" (861.00/3602 and /3627). 

To summarize: the picture we form of the 1917 American Red Cross Mission to Russia is remote 
from one of neutral humanitarianism. The mission was in fact a mission of Wall Street financiers to 
influence and pave the way for control, through either Kerensky or the Bolshevik revolutionaries, of 
the Russian market and resources. No other explanation will explain the actions of the mission. 
However, neither Thompson nor Robins was a Bolshevik. Nor was either even a consistent 
socialist. The writer is inclined to the interpretation that the socialist appeals of each man were 
covers for more prosaic objectives. Each man was intent upon the commercial; that is, each sought 
to use the political process in Russia for personal financial ends. Whether the Russian people 
wanted the Bolsheviks was of no concern. Whether the Bolshevik regime would act against the 
United States — as it consistently did later — was of no concern. The single overwhelming 
objective was to gain political and economic influence with the new regime, whatever its ideology. 
If William Boyce Thompson had acted alone, then his directorship of the Federal Reserve Bank 
would be inconsequential. However, the fact that his mission was dominated by representatives of 
Wall Street institutions raises a serious question — in effect, whether the mission was a planned, 
premeditated operation by a Wall Street syndicate. This the reader will have to judge for himself, as 
the rest of the story unfolds. 

• • • 


'John Foster Dulles, American Red Cross (New York: Harper, 1950). 

2 Minutes of the War Council of the American National Red Cross (Washington, D.C., May 

Gibbs Diary, August 9, 1917. State Historical Society of Wisconsin. 

4 Billings report to Henry P. Davison, October 22, 1917, American Red Cross Archives. 

5 The Pirnie papers also enable us to fix exactly the dates that members of the mission left 
Russia. In the case of William B. Thompson, this date is critical to the argument of this 
book: Thompson left Petrograd for London on December 4, 1917. George F. Kennan states 
Thompson left Petrograd on November 27, 1917 (Russia Leaves the War, p. 1 140). 

6 U.S. State Dept. Decimal File, 861.00/3644. 

7 Ibid. 

8 Ibid. 

9 Robins is the correct spelling. The name is consistently spelled "Robbins" in the Stale 
Department files. 

10 U.S. State Dept. Decimal File, 316-11-1265, March 19, 1918. 

"Bullard ms., U.S. State Dept. Decimal File, 316-11-1265. 

12 The New World Review (fall 1967, p. 40) comments on Robins, noting that he was "in 
sympathy with the aims of the Revolution, although a capitalist " 

Petrograd embassy, Red Cross file. 

U.S. State Dept. Decimal File, 861.00/4168. 

• • • 

Chapter VI 


Marx's great book Das Kapital is at once a monument of reasoning and a storehouse of 

Lord Milner, member of the British War Cabinet, 1917, and director of the London Joint 
Stock Bank 

William Boyce Thompson is an unknown name in twentieth-century history, yet Thompson played 
a crucial role in the Bolshevik Revolution. 1 Indeed, if Thompson had not been in Russia in 1917, 
subsequent history might have followed a quite different course. Without the financial and, more 
important, the diplomatic and propaganda assistance given to Trotsky and Lenin by Thompson, 
Robins, and their New York associates, the Bolsheviks may well have withered away and Russia 
evolved into a socialist but constitutional society. 

Who was William Boyce Thompson? Thompson was a promoter of mining stocks, one of the best 
in a high-risk business. Before World War I he handled stock-market operations for the 
Guggenheim copper interests. When the Guggenheims needed quick capital for a stock-market 
struggle with John D. Rockefeller, it was Thompson who promoted Yukon Consolidated Goldfields 
before an unsuspecting public to raise a $3.5 million war chest. Thompson was manager of the 
Kennecott syndicate, another Guggenheim operation, valued at $200 million. It was Guggenheim 
Exploration, on the other hand, that took up Thompson's options on the rich Nevada Consolidated 
Copper Company. About three quarters of the original Guggenheim Exploration Company was 
controlled by the Guggenheim family, the Whitney family (who owned Metropolitan magazine, 
which employed the Bolshevik John Reed), and John Ryan. In 1916 the Guggenheim interests 
reorganized into Guggenheim Brothers and brought in William C. Potter, who was formerly with 
Guggenheim's American Smelting and Refining Company but who was in 1916 first' vice president 
of Guaranty Trust. 

Extraordinary skill in raising capital for risky mining promotions earned Thompson a personal 
fortune and directorships in Inspiration Consolidated Copper Company, Nevada Consolidated 
Copper Company, and Utah Copper Company — all major domestic copper producers. Copper is, 
of course, a major material in the manufacture of munitions. Thompson was also director of the 
Chicago Rock Island & Pacific Railroad, the Magma Arizona Railroad and the Metropolitan Life 
Insurance Company. And of particular interest for this book, Thompson was "one of the heaviest 
stockholders in the Chase National Bank." It was Albert H. Wiggin, president of the Chase Bank, 
who pushed Thompson for a post in the Federal Reserve System; and in 1914 Thompson became 
the first full-term director of the Federal Reserve Bank of New York — the most important bank in 
the Federal Reserve System. 

By 1917, then, William Boyce Thompson was a financial operator of substantial means, 
demonstrated ability, with a flair for promotion and implementation of capitalist projects, and with 
ready access to the centers of political and financial power. This was the same man who first 
supported Aleksandr Kerensky, and who then became an ardent supporter of the Bolsheviks, 
bequeathing a surviving symbol of this support — a laudatory pamphlet in Russian, "Pravda o 
Rossii i Bol'shevikakh."- 

Before leaving Russia in early December 1917 Thompson handed over the American Red Cross 
Mission to his deputy Raymond Robins. Robins then organized Russian revolutionaries to 


implement the Thompson plan for spreading Bolshevik propaganda in Europe (see Appendix 3). A 
French government document confirms this: "It appeared that Colonel Robins . . . was able to send 
a subversive mission of Russian bolsheviks to Germany to start a revolution there."- This mission 
led to the abortive German Spartacist revolt of 1918. The overall plan also included schemes for 
dropping Bolshevik literature by airplane or for smuggling it across German lines. 

Thompson made preparations in late 1917 to leave Petrograd and sell the Bolshevik Revolution to 
governments in Europe and to the U.S. With this in mind, Thompson cabled Thomas W. Lamont, a 
partner in the Morgan firm who was then in Paris with Colonel E. M. House. Lamont recorded the 
receipt of this cablegram in his biography: 

Just as the House Mission was completing its discussions in Paris in December 1917, I 
received an arresting cable from my old school and business friend, William Boyce 
Thompson, who was then in Petrograd in charge of the American Red Cross Mission there.- 

Lamont journeyed to London and met with Thompson, who had left Petrograd on December 5, 
traveled via Bergen, Norway, and arrived in London on December 10. The most important 
achievement of Thompson and Lamont in London was to convince the British War Cabinet — then 
decidedly anti-Bolshevik — that the Bolshevik regime had come to stay, and that British policy 
should cease to be anti-Bolshevik, should accept the new realities, and should support Lenin and 
Trotsky. Thompson and Lamont left London on December 18 and arrived in New York on 
December 25, 1917. They attempted the same process of conversion in the United States. 


The secret British War Cabinet papers are now available and record the argument used by 
Thompson to sell the British government on a pro-Bolshevik policy. The prime minister of Great 
Britain was David Lloyd George. Lloyd George's private and political machinations rivaled those of 
a Tammany Hall politician — yet in his lifetime and for decades after, biographers were unable, or 
unwilling, to come to grips with them. In 1970 Donald McCormick's The Mask of Merlin lifted the 
veil of secrecy. McCormick shows that by 1917 David Lloyd George had bogged "too deeply in the 
mesh of international armaments intrigues to be a free agent" and was beholden to Sir Basil 
Zaharoff, an international armaments dealer, whose considerable fortune was made by selling arms 
to both sides in several wars.- Zaharoff wielded enormous behind-the-scenes power and, according 
to McCormick, was consulted on war policies by the Allied leaders. On more than one occasion, 
reports McCormick, Woodrow Wilson, Lloyd George, and Georges Clemenceau met in Zaharoff s 
Paris home. McCormick notes that "Allied statesmen and leaders were obliged to consult him 
before planning any great attack." British intelligence, according to McCormick, "discovered 
documents which incriminated servants of the Crown as secret agents of Sir Basil Zaharoff with the 
knowledge of Lloyd George"- In 1917 Zaharoff was linked to the Bolsheviks; he sought to divert 
munitions away from anti-Bolsheviks and had already intervened in behalf of the Bolshevik regime 
in both London and Paris. 

In late 1917, then — at the time Lamont and Thompson arrived in London — Prime Minister Lloyd 
George was indebted to powerful international armaments interests that were allied to the 
Bolsheviks and providing assistance to extend Bolshevik power in Russia. The British prime 
minister who met with William Thompson in 1917 was not then a free agent; Lord Milner was the 
power behind the scenes and, as the epigraph to this chapter suggests, favorably inclined towards 
socialism and Karl Marx. 

The "secret" War Cabinet papers give the "Prime Minister's account of a conversation with Mr. 
Thompson, an American returned from Russia,"- and the report made by the prime minister to the 
War Cabinet after meeting with Thompson.- The cabinet paper reads as follows: 


The Prime Minister reported a conversation he had had with a Mr. Thompson — an 
American traveller and a man of considerable means — who had just returned from Russia, 
and who had given a somewhat different impression of affairs in that country from what was 
generally believed. The gist of his remarks was to the effect that the Revolution had come to 
stay; that the Allies had not shown themselves sufficiently sympathetic with the Revolution; 
and that MM. Trotzki and Lenin were not in German pay, the latter being a fairly 
distinguished Professor. Mr. Thompson had added that he considered the Allies should 
conduct in Russia an active propaganda, carried out by some form of Allied Council 
composed o[ men especially selected [or the purpose; further, that on the whole, he 
considered, having regard to the character of the de facto Russian Government, the several 
Allied Governments were not suitably represented in Petrograd. In Mr. Thompson's opinion, 
it was necessary for the Allies to realise that the Russian army and people were out of the 
war, and that the Allies would have to choose between Russia as the friendly or a hostile 

The question was discussed as to whether the Allies ought not to change their policy in 
regard to the de facto Russian Government, the Bolsheviks being stated by Mr. Thompson 
to be and-German. In this connection Lord Robert Cecil drew attention to the conditions of 
the armistice between the German and Russian armies, which provided, inter alia, for 
trading between the two countries, and for the establishment of a Purchasing Commission in 
Odessa, the whole arrangement being obviously dictated by the Germans. Lord Robert Cecil 
expressed the view that the Germans would endeavour to continue the armistice until the 
Russian army had melted away. 

Sir Edward Carson read a communication, signed by M. Trotzki, which had been sent to him 
by a British subject, the manager of the Russian branch of the Vauxhall Motor Company, 
who had just returned from Russia [Paper G.T. — 3040]. This report indicated that M. 
Trotzki's policy was, ostensibly at any rate, one of hostility to the organisation of civilised 
society rather than pro-German. On the other hand, it was suggested that an assumed attitude 
of this kind was by no means inconsistent with Trotzki's being a German agent, whose 
object was to ruin Russia in order that Germany might do what she desired in that country. 

After hearing Lloyd George's report and supporting arguments, the War Cabinet decided to go 
along with Thompson and the Bolsheviks. Milner had a former British consul in Russia — Bruce 
Lockhart — ready and waiting in the wings. Lockhart was briefed and sent to Russia with 
instructions to work informally with the Soviets. 

The thoroughness of Thompson's work in London and the pressure he was able to bring to bear on 
the situation are suggested by subsequent reports coming into the hands of the War Cabinet, from 
authentic sources. The reports provide a quite different view of Trotsky and the Bolsheviks from 
that presented by Thompson, and yet they were ignored by the cabinet. In April 1918 General Jan 
Smuts reported to the War Cabinet his talk with General Nieffel, the head of the French Military 
Mission who had just returned from Russia: 

Trotski (sic) . . . was a consummate scoundrel who may not be pro-German, but is 
thoroughly pro-Trotski and pro-revolutionary and cannot in any way be trusted. His 
influence is shown by the way he has come to dominate Lockhart, Robins and the French 
representative. He [Nieffel] counsels great prudence in dealing with Trotski, who he admits 
is the only really able man in Russia.- 

Several months later Thomas D. Thacher, Wall Street lawyer and another member of the American 
Red CrAss Mission to Russia, was in London. On April 13, 1918, Thacher wrote to the American 
ambassador in London to the effect that he had received a request from H. P. Davison, a Morgan 
partner, "to confer with Lord Northcliffe" concerning the situation in Russia and then to go on to 


Paris "for other conferences." Lord Northcliffe was ill and Thacher left with yet another Morgan 
partner, Dwight W. Morrow, a memorandum to be submitted to Northcliffe on his return to 
London.— This memorandum not only made explicit suggestions about Russian policy that 
supported Thompson's position but even stated that "the fullest assistance should be given to the 
Soviet government in its efforts to organize a volunteer revolutionary army." The four main 
proposals in this Thacher report are: 

First of all . . . the Allies should discourage Japanese intervention in Siberia. 

In the second place, the fullest assistance should be given to the Soviet Government in its 
efforts to organize a volunteer revolutionary army. 

Thirdly, the Allied Governments should give their moral support to the Russian people in 
their efforts to work out their own political systems free from the domination of any foreign 
power .... 

Fourthly, until the time when open conflict shall result between the German Government 
and the Soviet Government of Russia there will be opportunity for peaceful commercial 
penetration by German agencies in Russia. So long as there is no open break, it will 
probably be impossible to entirely prevent such commerce. Steps should, therefore, be taken 
to impede, so far as possible, the transport of grain and raw materials to Germany from 


Why would a prominent Wall Street financier, and director of the Federal Reserve Bank, want to 
organize and assist Bolshevik revolutionaries? Why would not one but several Morgan partners 
working in concert want to encourage the formation of a Soviet "volunteer revolutionary army" — 
an army supposedly dedicated to the overthrow of Wall Street, including Thompson, Thomas 
Lamont, Dwight Morrow, the Morgan firm, and all their associates? 

Thompson at least was straightforward about his objectives in Russia: he wanted to keep Russia at 
war with Germany (yet he argued before the British War Cabinet that Russia was out of the war 
anyway) and to retain Russia as a market for postwar American enterprise. The December 1917 
Thompson memorandum to Lloyd George describes these aims.— The memorandum begins, "The 
Russian situation is lost and Russia lies entirely open to unopposed German exploitation .... "and 
concludes, "I believe that intelligent and courageous work will still prevent Germany from 
occupying the field to itself and thus exploiting Russia at the expense of the Allies." Consequently, 
it was German commercial and industrial exploitation of Russia that Thompson feared (this is also 
reflected in the Thacher memorandum) and that brought Thompson and his New York friends into 
an alliance with the Bolsheviks. Moreover, this interpretation is reflected in a quasi-jocular 
statement made by Raymond Robins, Thompson's deputy, to Bruce Lockhart, the British agent: 

You will hear it said that I am the representative of Wall Street; that I am the servant of 
William B. Thompson to get Altai copper for him; that I have already got 500,000 acres of 
the best timber land in Russia for myself; that I have already copped off the Trans-Siberian 
Railway; that they have given me a monopoly of the platinum of Russia; that this explains 
my working for the soviet .... You will hear that talk. Now, I do not think it is true, 
Commissioner, but let us assume it is true. Let us assume that I am here to capture Russia 
for Wall Street and American business men. Let us assume that you are a British wolf and I 
am an American wolf, and that when this war is over we are going to eat each other up for 
the Russian market; let us do so in perfectly frank, man fashion, but let us assume at the 

• • • 

same time that we are fairly intelligent wolves, and that we know that if we do not hunt 
together in this hour the German wolf will eat us both up, and then let us go to work 


With this in mind let us take a look at Thompson's personal motivations. Thompson was a financier, 
a promoter, and, although without previous interest in Russia, had personally financed the Red 
Cross Mission to Russia and used the mission as a vehicle for political maneuvering. From the total 
picture we can deduce that Thompson's motives were primarily financial and commercial. 
Specifically, Thompson was interested in the Russian market, and how this market could be 
influenced, diverted; and captured for postwar exploitation by a Wall Street syndicate, or 
syndicates. Certainly Thompson viewed Germany as an enemy, but less a political enemy than an 
economic or a commercial enemy. German industry and German banking were the real enemy. To 
outwit Germany, Thompson was willing to place seed money on any political power vehicle that 
would achieve his objective. In other words, Thompson was an American imperialist fighting 
against German imperialism, and this struggle was shrewdly recognized and exploited by Lenin and 

The evidence supports this apolitical approach. In early August 1917, William Boyce Thompson 
lunched at the U.S. Petrograd embassy with Kerensky, Terestchenko, and the American ambassador 
Francis. Over lunch Thompson showed his Russian guests a cable he had just sent to the New York 
office of J.P. Morgan requesting transfer of 425,000 rubles to cover a personal subscription to the 
new Russian Liberty Loan. Thompson also asked Morgan to "inform my friends I recommend these 
bonds as the best war investment I know. Will be glad to look after their purchasing here without 
compensation"; he then offered personally to take up twenty percent of a New York syndicate 
buying five million rubles of the Russian loan. Not unexpectedly, Kerensky and Terestchenko 
indicated "great gratification" at support from Wall Street. And Ambassador Francis by cable 
promptly informed the State Department that the Red Cross commission was "working 
harmoniously with me," and that it would have an "excellent effect."— Other writers have recounted 
how Thompson attempted to convince the Russian peasants to support Kerensky by investing $1 
million of his own money and U.S. government funds on the same order of magnitude in 
propaganda activities. Subsequently, the Committee on Civic Education in Free Russia, headed by 
the revolutionary "Grandmother" Breshkovskaya, with David Soskice (Kerensky's private secretary) 
as executive, established newspapers, news bureaus, printing plants, and speakers bureaus to 
promote the appeal — "Fight the kaiser and save the revolution." It is noteworthy that the 
Thompson-funded Kerensky campaign had the same appeal — "Keep Russia in the war" — as had 
his financial support of the Bolsheviks. The common link between Thompson's support of Kerensky 
and his support of Trotsky and Lenin was — "continue the war against Germany" and keep 
Germany out of Russia. 

In brief, behind and below the military, diplomatic, and political aspects of World War I, there was 
another battle raging, namely, a maneuvering for postwar world economic power by international 
operators with significant muscle and influence. Thompson was not a Bolshevik; he was not even 
pro-Bolshevik. Neither was he pro-Kerensky. Nor was he even pro-American. The overriding 
motivation was the capturing of the postwar Russian market. This was a commercial, not an 
ideological, objective. Ideology could sway revolutionary operators like Kerensky, Trotsky, Lenin 
et al., but not financiers. 

The Lloyd George memorandum demonstrates Thompson's partiality for neither Kerensky nor the 
Bolsheviks: "After the overthrow of the last Kerensky government we materially aided the 
dissemination of the Bolshevik literature, distributing it through agents and by aeroplanes to the 
Germany army."— This was written in mid-December 1917, only five weeks after the start of the 
Bolshevik Revolution, and less than four months after Thompson expressed his support of 
Kerensky over lunch in the American embassy. 

• • • 


Thompson then returned and toured the United States with a public plea for recognition of the 
Soviets. In a speech to the Rocky Mountain Club of New York in January 1918, Thompson called 
for assistance for the emerging Bolshevik government and, appealing to an audience composed 
largely of Westerners, evoked the spirit of the American pioneers: 

These men would not have hesitated very long about extending recognition and giving the 
fullest help and sympathy to the workingman's government of Russia, because in 1819 and 
the years following we had out there bolsheviki governments . . . and mighty good 
governments too....— 

It strains the imagination to compare the pioneer experience of our Western frontier to the ruthless 
extermination of political opposition then under way in Russia. To Thompson, promoting this was 
no doubt looked upon as akin to his promotion of mining stocks in days gone by. As for those in 
Thompson's audience, we know not what they thought; however, no one raised a challenge. The 
speaker was a respected director of the Federal Reserve Bank of New York, a self-made millionaire 
(and that counts for much). And after all, had he not just returned from Russia? But all was not rosy. 
Thompson's biographer Hermann Hagedorn has written that Wall Street was "stunned" that his 
friends were "shocked" and "said he had lost his head, had turned Bolshevist himself."— 

While Wall Street wondered whether he had indeed "turned Bolshevik," Thompson found sympathy 
among fellow directors on the board of the Federal Reserve Bank of New York. Codirector W. L. 
Saunders, chairman of Ingersoll-Rand Corporation and a director of the FRB, wrote President 
Wilson on October 17, 1918, stating that he was "in sympathy with the Soviet form of 
Government"; at the same time he disclaimed any ulterior motive such as "preparing now to get the 
trade of the world after the war.— 

Most interesting of Thompson's fellow directors was George Foster Peabody, deputy chairman of 
the Federal Reserve Bank of New York and a close friend of socialist Henry George. Peabody had 
made a fortune in railroad manipulation, as Thompson had made his fortune in the manipulation of 
copper stocks. Peabody then became active in behalf of government ownership of railroads, and 
openly adopted socialization.— How did Peabody reconcile his private-enterprise success with 
promotion of government ownership? According to his biographer Louis Ware, "His reasoning told 
him that it was important for this form of transport to be operated as a public service rather than for 
the advantage of private interests." This high-sounding do-good reasoning hardly rings true. It 
would be more accurate to argue that given the dominant political influence of Peabody and his 
fellow financiers in Washington, they could by government control of railroads more easily avoid 
the rigors of competition. Through political influence they could manipulate the police power of the 
state to achieve what they had been unable, or what was too costly, to achieve under private 
enterprise. In other words, the police power of the state was a means of maintaining a private 
monopoly. This was exactly as Frederick C. Howe had proposed.— The idea of a centrally planned 
socialist Russia must have appealed to Peabody. Think of it — one gigantic state monopoly! And 
Thompson, his friend and fellow director, had the inside track with the boys running the 


The Bolsheviks for their part correctly assessed a lack of sympathy among the Petrograd 
representatives of the three major Western powers: the United States, Britain and France. The 
United States was represented by Ambassador Francis, undisguisedly out of sympathy with the 
revolution. Great Britain was represented by Sir James Buchanan, who had strong ties to the tsarist 


monarchy and was suspected of having helped along the Kerensky phase of the revolution. France 
was represented by Ambassador Paleologue, overtly anti-Bolshevik. In early 1918 three additional 
personages made their appearance; they became de facto representatives of these Western countries 
and edged out the officially recognized representatives. 

Raymond Robins took over the Red Cross Mission from W. B. Thompson in early December 1917 
but concerned himself more with economic and political matters than obtaining relief and assistance 
for poverty-stricken Russia. On December 26, 1917, Robins cabled Morgan partner Henry Davison, 
temporarily the director general of the American Red Cross: "Please urge upon the President the 
necessity of our continued intercourse with the Bolshevik Government."— On January 23, 1918, 
Robins cabled Thompson, then in New York: 

Soviet Government stronger today than ever before. Its authority and power greatly 
consolidated by dissolution of Constituent Assembly .... Cannot urge too strongly 
importance of prompt recognition of Bolshevik authority .... Sisson approves this text and 
requests you to show this cable to Creel. Thacher and Wardwell concur.— 

Later in 1918, on his return to the United States, Robins submitted a report to Secretary of State 
Robert Lansing containing this opening paragraph: "American economic cooperation with Russia; 
Russia will welcome American assistance in economic reconstruction."— 

Robins' persistent efforts in behalf of the Bolshevik cause gave him a certain prestige in the 
Bolshevik camp, and perhaps even some political influence. The U.S. embassy in London claimed 
in November 1918 that "Salkind owe[s] his appointment, as Bolshevik Ambassador to Switzerland, 
to an American ... no other than Mr. Raymond Robins."— About this time reports began filtering 
into Washington that Robins was himself a Bolshevik; for example, the following from 
Copenhagen, dated December 3, 1918: 

Confidential. According to a statement made by Radek to George de Patpourrie, late Austria 
Hungarian Consul General at Moscow, Colonel Robbins [sic], formerly thief of the 
American Red Cross Mission to Russia, is at present in Moscow negotiating with the Soviet 
Government and arts as the intermediary between the Bolsheviki and their friends in the 
United States. The impression seems to be in some quarters that Colonel Robbins is himself 
a Bolsheviki while others maintain that he is not but that his activities in Russia have been 
contrary to the interest of Associated Governments.— 

Materials in the files of the Soviet Bureau in New York, and seized by the Lusk Committee in 1919, 
confirm that both Robins and his wife were closely associated with Bolshevik activities in the 
United States and with the formation of the Soviet Bureau in New York.— 

The British government established unofficial relations with the Bolshevik regime by sending to 
Russia a young Russian-speaking agent, Bruce Lockhart. Lockhart was, in effect, Robins' opposite 
number; but unlike Robins, Lockhart had direct channels to his Foreign Office. Lockhart was not 
selected by the foreign secretary or the Foreign Office; both were dismayed at the appointment. 
According to Richard Ullman, Lockhart was "selected for his mission by Milner and Lloyd George 
themselves .... "Maxim Litvinov, acting as unofficial Soviet representative in Great Britain, wrote 
for Lockhart a letter of introduction to Trotsky; in it he called the British agent "a thoroughly honest 
man who understands our position and sympathizes with us.— 

We have already noted the pressures on Lloyd George to take a pro-Bolshevik position, especially 
those from William B. Thompson, and those indirectly from Sir Basil Zaharoff and Lord Milner. 
Milner was, as the epigraph to this chapter suggests, exceedingly prosocialist. Edward Crankshaw 
has succinctly outlined Milner's duality. 

• • • 

Some of the passages [in Milner] on industry and society . . . are passages which any 
Socialist would be proud to have written. But they were not written by a Socialist. They 
were written by "the man who made the Boer War." Some of the passages on Imperialism 
and the white man's burden might have been written by a Tory diehard. They were written 
by the student of Karl Marx.— 

According to Lockhart, the socialist bank director Milner was a man who inspired in him "the 
greatest affection and hero-worship."— Lockhart recounts how Milner personally sponsored his 
Russian appointment, pushed it to cabinet level, and after his appointment talked "almost daily" 
with Lockhart. While opening the way for recognition of the Bolsheviks, Milner also promoted 
financial support for their opponents in South Russia and elsewhere, as did Morgan in New York. 
This dual policy is consistent with the thesis that the modus operandi of the politicized 
internationalists — such as Milner and Thompson — was to place state money on any revolutionary 
or counterrevolutionary horse that looked a possible winner. The internationalists, of course, 
claimed any subsequent benefits. The clue is perhaps in Bruce Lockhart's observation that Milner 
was a man who "believed in the highly organized state."— 

The French government appointed an even more openly Bolshevik sympathizer, Jacques Sadoul, an 
old friend of Trotsky 


In sum, the Allied governments neutralized their own diplomatic representatives in Petrograd and 
replaced them with unofficial agents more or less sympathetic to the Bolshevists. 

The reports of these unofficial ambassadors were in direct contrast to pleas for help addressed to the 
West from inside Russia. Maxim Gorky protested the betrayal of revolutionary ideals by the Lenin- 
Trotsky group, which had imposed the iron grip of a police state in Russia: 

We Russians make up a people that has never yet worked in freedom, that has never yet had 
a chance to develop all its powers and its talents. And when I think that the revolution gives 
us the possibility of free work, of a many-sided joy in creating, my heart is tilled with great 
hope and joy, even in these cursed days that are besmirched with blood and alcohol. 

There is where begins the line of my decided and irreconcilable separation [torn the insane 
actions of the People's Commissaries. I consider Maximalism in ideas very useful for the 
boundless Russian soul; its task is to develop in this soul great and bold needs, to call forth 
the so necessary fighting spirit and activity, to promote initiative in this indolent soul and to 
give it shape and life in general. 

But the practical Maximalism of the Anarcho-Communists and visionaries from the Smolny 
is ruinous for Russia and, above all, for the Russian working class. The People's 
Commissaries handle Russia like material for an experiment. The Russian people is for them 
what the Horse is for learned bacteriologists who inoculate the horse with typhus so that the 
anti-typhus lymph may develop in its blood. Now the Commissaries are trying such a 
predestined-to-failure experiment upon the Russian people without thinking that the 
tormented, half-starved horse may die. 

The reformers from the Smolny do not worry about Russia. They are cold-bloodedly 
sacrificing Russia in the name of their dream of the worldwide and European revolution. 
And just as long as I can, I shall impress this upon the Russian proletarian: "Thou art being 
led to destruction} Thou art being used as material for an inhuman experiment!"— 

Also in contrast to the reports of the sympathetic unofficial ambassadors were the reports from the 
old-line diplomatic representatives. Typical o[ many messages [lowing into Washington in early 

• • • 

1918 — particularly after Woodrow Wilson's expression of support for the Bolshevik 
governments — was the following cable [torn the U.S. legation in Bern, Switzerland: 

For Polk. President's message to Consul Moscow not understood here and people are asking 
why the President expresses support of Bolsheviki, in view of rapine, murder and anarchy of 
these bands.— 

Continued support by the Wilson administration for the Bolsheviks led to the resignation of De Witt 
C. Poole, the capable American charge d'affaires in Archangel (Russia): 

It is my duty to explain frankly to the department the perplexity into which I have been 
thrown by the statement of Russian policy adopted by the Peace Conference, January 22, on 
the motion of the President. The announcement very happily recognizes the revolution and 
confirms again that entire absence of sympathy for any form of counter revolution which has 
always been a key note of American policy in Russia, but it contains not one [word] of 
condemnation for the other enemy of the revolution — the Bolshevik Government.— 

Thus even in the early days of 1918 the betrayal of the libertarian revolution had been noted by such 
acute observers as Maxim Gorky and De Witt C. Poole. Poole's resignation shook the State 
Department, which requested the "utmost reticence regarding your desire to resign" and stated that 
"it will be necessary to replace you in a natural and normal manner in order to prevent grave and 
perhaps disastrous effect upon the morale of American troops in the Archangel district which might 
lead to loss of American lives."— 

So not only did Allied governments neutralize their own government representatives but the U.S. 
ignored pleas from within and without Russia to cease support of the Bolsheviks. Influential support 
of the Soviets came heavily from the New York financial area (little effective support emanated 
from domestic U.S. revolutionaries). In particular, it came from American International 
Corporation, a Morgan-controlled firm. 


We are now in a position to compare two cases — not by any means the only such cases — in 
which American citizens Jacob Rubin and Robert Minor assisted in exporting the revolution to 
Europe and other parts of Russia. 

Jacob H. Rubin was a banker who, in his own words, "helped to form the Soviet Government of 
Odessa."— Rubin was president, treasurer, and secretary of Rubin Brothers of 19 West 34 Street, 
New York City. In 1917 he was associated with the Union Bank of Milwaukee and the Provident 
Loan Society of New York. The trustees of the Provident Loan Society included persons mentioned 
elsewhere as having connection with the Bolshevik Revolution: P. A. Rockefeller, Mortimer L. 
Schiff, and James Speyer. 

By some process — only vaguely recounted in his book / Live to Tell— — Rubin was in Odessa in 
February 1920 and became the subject of a message from Admiral McCully to the State Department 
(dated February 13, 1920, 861.00/6349). The message was to the effect that Jacob H. Rubin of 
Union Bank, Milwaukee, was in Odessa and desired to remain with the Bolshevists — "Rubin does 
not wish to leave, has offered his services to Bolsheviks and apparently sympathizes with them." 
Rubin later found his way back to the U.S. and gave testimony before the House Committee on 
Foreign Affairs in 1921: 

I had been with the American Red Cross people at Odessa. I was there when the Red Army 
took possession of Odessa. At that time I was favorably inclined toward the Soviet 


Government, because I was a socialist and had been a member of that party for 20 years. I 
must admit that to a certain extent I helped to form the Soviet Government of Odessa 


While adding that he had been arrested as a spy by the Denikin government of South Russia, we 
learn little more about Rubin. We do, however, know a great deal more about Robert Minor, who 
was caught in the act and released by a mechanism reminiscent of Trotsky's release from a Halifax 
prisoner-of-war camp. 


Bolshevik propaganda work in Germany,— financed and organized by William Boyce Thompson 
and Raymond Robins, was implemented in the field by American citizens, under the supervision of 
Trotsky's People's Commissariat for Foreign Affairs: 

One of Trotsky's earliest innovations in the Foreign Office had been to institute a Press 
Bureau under Karl Radek and a Bureau of International Revolutionary Propaganda under 
Boris Reinstein, among whose assistants were John Reed and Albert Rhys Williams, and the 
full blast of these power-houses was turned against the Germany army. 

A German newspaper, Die Fackel (The Torch), was printed in editions of half a million a 
day and sent by special train to Central Army Committees in Minsk, Kiev, and other cities, 
which in turn distributed them to other points along the front.— 

Robert Minor was an operative in Reinstein's propaganda bureau. Minor's ancestors were prominent 
in early American history. General Sam Houston, first president of the Republic of Texas, was 
related to Minor's mother, Routez Houston. Other relatives were Mildred Washington, aunt of 
George Washington, and General John Minor, campaign manager for Thomas Jefferson. Minor's 
father was a Virginia lawyer who migrated to Texas. After hard years with few clients, he became a 
San Antonio judge. 

Robert Minor was a talented cartoonist and a socialist. He left Texas to come East. Some of his 
contributions appeared in Masses, a pro-Bolshevik journal. In 1918 Minor was a cartoonist on the 
staff of the Philadelphia Public Ledger. Minor left New York in March 1918 to report the 
Bolshevik Revolution. While in Russia Minor joined Reinstein's Bureau of International 
Revolutionary Propaganda (see diagram), along with Philip Price, correspondent of the Daily 
Herald and Manchester Guardian, and Jacques Sadoul, the unofficial French ambassador and friend 
of Trotsky. 

Excellent data on the activities of Price, Minor, and Sadoul have survived in the form of a Scotland 
Yard (London) Secret Special Report, No. 4, entitled, "The Case of Philip Price and Robert Minor," 
as well as in reports in the files of the State Department, Washington, D.C.— According to this 
Scotland Yard report, Philip Price was in Moscow in mid-1917, before the Bolshevik Revolution, 
and admitted, "I am up to my neck in the Revolutionary movement." Between the revolution and 
about the fall of 1918, Price worked with Robert Minor in the Commissariat for Foreign Affairs. 

• • • 








Field Operatives 

John Reed 
Louis Bryant 
Albert Rhys Williams 
Robert Minor 
Philip Price 
Jacques Sadoul 


In November 1918 Minor and Price left Russia and went to Germany.— Their propaganda products 
were first used on the Russian Murman front; leaflets were dropped by Bolshevik airplanes amongst 
British, French, and American troops — according to William Thompson's program.— The decision 
to send Sadoul, Price, and Minor to Germany was made by the Central Executive Committee of the 
Communist Party. In Germany their activities came to the notice of British, French, and American 
intelligence. On February 15, 1919, Lieutenant J. Habas of the U.S. Army was sent to Diisseldorf, 
then under control of a Spartacist revolutionary group; he posed as a deserter from the American 
army and offered his services to the Spartacists. Habas got to know Philip Price and Robert Minor 
and suggested that some pamphlets be printed for distribution amongst American troops. The 
Scotland Yard report relates that Price and Minor had already written several pamphlets for British 
and American troops, that Price had translated some of Wilhelm Liebknecht's works into English, 
and that both were working on additional propaganda tracts. Habas reported that Minor and Price 
said they had worked together in Siberia printing an English-language Bolshevik newspaper for 
distribution by air among American and British troops.— 

On June 8, 1919, Robert Minor was arrested in Paris by the French police and handed over to the 
American military authorities in Coblenz. Simultaneously, German Spartacists were arrested by the 
British military authorities in the Cologne area. Subsequently, the Spartacists were convicted on 

• • • 

charges of conspiracy to cause mutiny and sedition among Allied forces. Price was arrested but, like 
Minor, speedily liberated. This hasty release was noted in the State Department: 

Robert Minor has now been released, for reasons that are not quite clear, since the evidence 
against him appears to have been ample to secure conviction. The release will have an 
unfortunate effect, for Minor is believed to have been intimately connected with the IWW in 

The mechanism by which Robert Minor secured his release is recorded in the State Department 
files. The first relevant document, dated June 12, 1919, is from the U.S. Paris embassy to the 
secretary of state in Washington, D.C., and marked URGENT AND CONFIDENTIAL. 42 The 
French Foreign Office informed the embassy that on June 8, Robert Minor, "an American 
correspondent," had been arrested in Paris and turned over to the general headquarters of the Third 
American Army in Coblenz. Papers found on Minor appear "to confirm the reports furnished on his 
activities. It would therefore seem to be established that Minor has entered into relations in Paris 
with the avowed partisans of Bolshevism." The embassy regarded Minor as a "particularly 
dangerous man." Inquiries were being made of the American military authorities; the embassy 
believed this to be a matter within the jurisdiction of the military alone, so that it contemplated no 
action although instructions would be welcome. 

On June 14, Judge R. B. Minor in San Antonio, Texas, telegraphed Frank L. Polk in the State 

Press reports detention my son Robert Minor in Paris for unknown reasons. Please do all 
possible to protect him I refer to Senators from Texas. 

[sgd.] R. P. Minor, District Judge, San Antonio, Texas- 
Polk telegraphed Judge Minor that neither the State Department nor the War Department had 
information on the detention of Robert Minor, and that the case was now before the military 
authorities at Coblenz. Late on June 13 the State Department received a "strictly confidential 
urgent" message from Paris reporting a statement made by the Office of Military Intelligence 
(Coblenz) in regard to the detention of Robert Minor: "Minor was arrested in Paris by French 
authorities upon request of British Military Intelligence and immediately turned over to American 
headquarters at Coblenz."— He was charged with writing and disseminating Bolshevik 
revolutionary literature, which had been printed in Dusseldorf, amongst British and American 
troops in the areas they occupied. The military authorities intended to examine the charges against 
Minor, and if substantiated, to try him by court-martial. If the charges were not substantiated, it was 
their intention to turn Minor over to the British authorities, "who originally requested that the 
French hand him over to them."— Judge Minor in Texas independently contacted Morris Sheppard, 
U.S. senator from Texas, and Sheppard contacted Colonel House in Paris. On June 17, 1919, 
Colonel House sent the following to Senator Sheppard: 

Both the American Ambassador and I are following Robert Minor's case. Am informed that 
he is detained by American Military authorities at Cologne on serious charges, the exact 
nature of which it is difficult to discover. Nevertheless, we will take every possible step to 
insure just consideration for him.— 

Both Senator Sheppard and Congressman Carlos Bee (14th District, Texas) made their interest 
known to the State Department. On June 27, 1919, Congressman Bee requested facilities so that 
Judge Minor could send his son $350 and a message. On July 3 Senator Sheppard wrote Frank Polk, 
stating that he was "very much interested" in the Robert Minor case, and wondering whether State 
could ascertain its status, and whether Minor was properly under the jurisdiction of the military 
authorities. Then on July 8 the Paris embassy cabled Washington: "Confidential. Minor released by 


American authorities . . . returning to the United States on the first available boat." This sudden 
release intrigued the State Department, and on August 3 Secretary of State Lansing cabled Paris: 
"Secret. Referring to previous, am very anxious to obtain reasons for Minor's release by Military 

Originally, U.S. Army authorities had wanted the British to try Robert Minor as "they feared 
politics might intervene in the United States to prevent a conviction if the prisoner was tried by 
American court-martial." However, the British government argued that Minor was a United States 
citizen, that the evidence showed he prepared propaganda against American troops in the first 
instance, and that, consequently — so the British Chief of Staff suggested — Minor should be tried 
before an American court. The British Chief of Staff did "consider it of the greatest importance to 
obtain a conviction if possible."— 

Documents in the office of the Chief of Staff of the Third Army relate to the internal details of 
Minor's release." A telegram of June 23, 1919, from Major General Harbord, Chief of Staff of the 
Third Army (later chairman of the Board of International General Electric, whose executive center, 
coincidentally, was also at 120 Broadway), to the commanding general, Third Army, stated that 
Commander in Chief John J. Pershing "directs that you suspend action in the case against Minor 
pending further orders." There is also a memorandum signed by Brigadier General W. A. Bethel in 
the office of the judge advocate, dated June 28, 1919, marked "Secret and Confidential," and 
entitled "Robert Minor, Awaiting Trial by a Military Commission at Headquarters, 3rd Army." The 
memo reviews the legal case against Minor. Among the points made by Bethel is that the British 
were obviously reluctant to handle the Minor case because "they fear American opinion in the event 
of trial by them of an American for a war offense in Europe," even though tire offense with which 
Minor is charged is as serious "as a man can commit." This is a significant statement; Minor, Price, 
and Sadoul were implementing a program designed by Federal Reserve Bank director Thompson, a 
fact confirmed by Thompson's own memorandum (see Appendix 3). Was not therefore Thompson 
(and Robins), to some degree, subject to the same charges? 

After interviewing Siegfried, the witness against Minor, and reviewing the evidence, Bethel 

I thoroughly believe Minor to be guilty, but if I was sitting in court, I would not put guilty 
on the evidence now available — the testimony of one man only and that man acting in the 
character of a detective and informer. 

Bethel goes on to state that it would be known within a week or ten days whether substantial 
corroboration of Siegfried's testimony was available. If available, "I think Minor should be tried," 
but "if corroboration cannot be had, I think it would be better to dismiss the case." 

This statement by Bethel was relayed in a different form by General Harbord in a telegram of July 5 
to General Malin Craig (Chief of Staff, Third Army, Coblenz): 

With reference to the case against Minor, unless other witnesses than Siegfried have been 
located by this time C in C directs the case be dropped and Minor liberated. Please 
acknowledge and state action. 

The reply from Craig to General Harbord (July 5) records that Minor was liberated in Paris and 
adds, "This is in accordance with his own wishes and suits our purposes." Craig also adds that other 
witnesses had been obtained. 

This exchange of telegrams suggests a degree of haste in dropping the charges against Robert 
Minor, and haste suggests pressure. There was no significant attempt made to develop evidence. 
Intervention by Colonel House and General Pershing at the highest levels in Paris and the 


cablegram from Colonel House to Senator Morris Sheppard give weight to American newspaper 
reports that both House and President Wilson were responsible for Minor's hasty release without 
trial. M 

Minor returned to the United States and, like Thompson and Robins before him, toured the U.S. 
promoting the wonders of Bolshevik Russia. 

By way of summary, we find that Federal Reserve Bank director William Thompson was active in 
promoting Bolshevik interests in several ways — production of a pamphlet in Russian, financing 
Bolshevik operations, speeches, organizing (with Robins) a Bolshevik revolutionary mission to 
Germany (and perhaps France), and with Morgan partner Lamont influencing Lloyd George and the 
British War Cabinet to effect a change in British policy. Further, Raymond Robins was cited by the 
French government for organizing Russian Bolsheviks for the German revolution. We know that 
Robins was undisguisedly working for Soviet interests in Russia and the United States. Finally, we 
find that Robert Minor, one of the revolutionary propagandists used in Thompson's program, was 
released under circumstances suggesting intervention from the highest levels of the U.S. 

Obviously, this is but a fraction of a much wider picture. These are hardly accidental or random 
events. They constitute a coherent, continuing pattern over several years. They suggest powerful 
influence at the summit levels of several governments. 


'For a biography see Hermann Hagedorn, The Magnate: William Boyce Thompson and His 
Time (1869-1930) (New York: Reynal & Hitchcock, 1935). 

2 Polkovnik Villiam' Boic' Thompson', "Pravda o Rossii i Bol'shevikakh" (New York: 
Russian- American Publication Society, 1918). 

3 John Bradley, Allied Intervention in Russia (London: Weidenfeld andNicolson, 1968.) 

4 Thomas W. Lamont, Across World Frontiers (New York: Harcourt, Brace, 1959), p. 85. 
See also pp. 94-97 for massive breastbeating over the failure of President Wilson to act 
promptly to befriend the Soviet regime. Corliss Lamont, his son, became a [font-line 
domestic leftist in the U.S. 

5 Donald McCormick, The Mask of Merlin (London: MacDonald, 1963; New York: Holt, 
Rinehart and Winston, 1964), p. 208. Lloyd George's personal life would certainly leave him 
open to blackmail. 

6 Ibid. McCormick's italics. 

7 British War Cabinet papers, no. 302, sec. 2 (Public Records Office, London). 

8 The written memorandum that Thompson submitted to Lloyd George and that became the 
basis for the War Cabinet statement is available from U.S. archival sources and is printed in 
full in Appendix 3. 

9 War Cabinet papers, 24/49/7197 (G.T. 4322) Secret, April 24, 1918. 

• • • 

10 Letter reproduced in full in Appendix 3. It should be noted that we have identified Thomas 
Lamont, Dwight Morrow, and H. P. Davison as being closely involved in developing policy 
towards the Bolsheviks. All were partners in the J.P. Morgan firm. Thacher was with the law 
firm Simpson, Thacher & Bartlett and was a close friend of Felix Frankfurter. 

"Complete memorandum is in U.S. State Dept. Decimal File, 316-13-698. 

12 See Appendix 3. 

1 U.S., Senate, Bolshevik Propaganda, Hearings before a Subcommittee of the Committee 
on the Judiciary, 65th Cong., t919, p. 802. 

14 U.S. State Dept. Decimal File, 861.51/184. 

15 See Appendix 3. 

"inserted by Senator Calder into the Congressional Record, January 31, 1918, p. 1409. 

17 F£agedorn, op. tit, p. 263. 

18 U.S. State Dept. Decimal File, 861.00/3005. 

19 Louis Ware, George Foster Peabody (Athens: University of Georgia Press, 1951). 

20 Seep. 16. 

If this argument seems too farfetched, the reader should see Gabriel Kolko, Railroads and 
Regulation 1877-1916 (New York: W. W. Norton, 1965), which describes how pressures for 
government control and formation of the Interstate Commerce Commission came from the 
railroad owners, not from farmers and users of railroad services. 

C. K. Cumming and Waller W. Pettit, Russian-American Relations, Documents and 
Papers (New York: Harcourt, Brace & Howe, 1920), doe. 44. 

23 Ibid., doc. 54. 

24 Ibid., doc. 92. 

25 U.S. State Dept. Decimal File, 861.00/3449. But see Kennan, Russia Leaves the War, pp. 

26 Ibid., 861.00 3333. 

27 See chapter seven. 

28 Richard H. Ullman, Intervention and the War (Princeton, N.J.: Princeton University Press, 
1961), t). 61. 

29 Edward Crankshaw, The Forsaken Idea: A Study o! Viscount Milner (London: Longmans 

Green, 1952), p. 269. 


Robert Hamilton Bruce Lockhart, British Agent (New York: Putnam's, 1933), p. 119. 


Ibid., p. 204. 

• • • 


32 See Jacques Sadoul, Notes sur la revolution bolchevique (Paris: Editions de la sirene, 

34 U.S. State Dept. Decimal File, 861.00/1305, March 15, 1918. 

35 Ibid., 861.00/3804. 

36 Ibid. 

7 U.S., House, Committee on Foreign Affairs, Conditions in Russia, 66th Cong., 3d sess., 

Jacob H. Rubin, 1 Live to Tell: The Russian Adventures o! an American Socialist 

(Indianapolis: Bobbs-Merrill, 1934). 


U.S., House, Committee on Foreign Affairs, op. cit. 

See George G. Bruntz, Allied Propaganda and the Collapse o! the German Empire in 
1918 (Stanford, Calif: Stanford University Press, 1938), pp. 144-55; see also herein p. 82. 



John W. Wheeler-Bennett, The Forgotten Peace (New York: William Morrow, 1939). 

42 There is a copy of this Scotland Yard report in U.S. Start' Dept. Decimal File, 316-23-1 184 

43 Joseph North, Robert Minor: Artist and Crusader (New York: International Publishers, 

44 Samples of Minor's propaganda tracts are still in the U.S. State Dept. files. See p. 197-200 
on Thompson. 

45 See Appendix 3. 

46 U.S. State Dept. Decimal File, 316-23-1 184. 

47 Ibid., 861.00/4680 (316-22-0774). 

48 Ibid., 861.00/4685 (/783). 

49 U.S. State Dept. Decimal File, 861.00/4688 (/788). 

50 Ibid. 

51 Ibid., 316-33-0824. 

52 U.S. State Dept. Decimal File, 861.00/4874. 

"Office of Chief of Staff, U.S. Army, National Archives, Washington, D.C. 

54 U.S., Senate, Congressional Record, October 1919, pp. 6430, 6664-66, 7353-54; and New 
York Times, October It, 1919. See also Sacramento Bee, July 17, 1919. 

• • • 

Chapter VII 


Martens is very much in the limelight. There appears to be no doubt about his 
connection with the Guarantee [sic] Trust Company, Though it is surprising that so 
large and influential an enterprise should have dealings with a Bolshevik concern. 

Scotland Yard Intelligence Report, London, 1919 

Following on the initial successes of the revolution, the Soviets wasted little time in attempting 
through former U.S. residents to establish diplomatic relations with and propaganda outlets in the 
United States. In June 1918 the American consul in Harbin cabled Washington: 

Albert R. Williams, bearer Department passport 52,913 May 15, 1917 proceeding United 
States to establish information bureau for Soviet Government for which he has written 
authority. Shall I visa?- 

Washington denied the visa and so Williams was unsuccessful in his attempt to establish an 
information bureau here. Williams was followed by Alexander Nyberg (alias Santeri Nuorteva), a 
former Finnish immigrant to the United States in January 1912, who became the first operative 
Soviet representative in the United States. Nyberg was an activtive propagandist. In fact, in 1919 be 
was, according to J. Edgar Hoover (in a letter to the U.S. Committee on Foreign Affairs), "the 
forerunner of LCAK Martens anti with Gregory Weinstein the most active individual of official 
Bolshevik propaganda in the United States. "- 

Nyberg was none too successful as a diplomatic representative or, ultimately, as a propagandist. 
The State Departmment files record an interview with Nyberg by the counselors' office, dated 
January 29, 1919. Nyberg was accompanied by H. Kellogg, described as "an American citizen, 
graduate of Harvard," and, more surprisingly, by a Mr. McFarland, an attorney for the Hearst 
organization. The State Department records show that Nyberg made "many misstatements in regard 
to the attitude to the Bolshevik Government" and claimed that Peters, the Lett terrorist police chief 
in Petrograd, was merely a "kind-hearted poet." Nyberg requested the department to cable Lenin, 
"on the theory that it might be helpful in bringing about the conference proposed by the Allies at 
Paris."- The proposed message, a rambling appeal to Lenin to gain international acceptance 
appearing at the Paris Conference, was not sent.- 


Alexander Nyberg (Nuorteva) was then let go and replaced by the Soviet Bureau, which was 
established in early 1919 in the World Tower Building, 110 West 40 Street, New York City. The 
bureau was headed by a German citizen, Ludwig C. A. K. Martens, who is usually billed as the first 
ambassador of the Soviet Union in the United States, and who, up to that time, had been vice 
president of Weinberg & Posner, an engineering firm located at 120 Broadway, New York City. 
Why the "ambassador" and his offices were located in New York rather than in Washington, D.C. 
was not explained; it does suggest that trade rather than diplomacy was its primary objective. In any 
event, the bureau promptly issued a call lot Russian trade with the United States. Industry had 
collapsed and Russia direly needed machinery, railway goods, clothing, chemicals, drugs — indeed, 
everything utilized by a modern civilization. In exchange the Soviets offered gold and raw 
materials. The Soviet Bureau then proceeded to arrange contracts with American firms, ignoring the 

• • • 

facts of the embargo and nonrecognition. At the same time it was providing financial support for the 
emerging Communist Party U.S.A.- 

On May 7, 1919, the State Department slapped down business intervention in behalf of the bureau 
(noted elsewhere),- and repudiated Ludwig Martens, the Soviet Bureau, and the Bolshevik 
government ol Russia. This official rebuttal did not deter the eager order-hunters in American 
industry. When the Soviet Bureau offices were raided on June 12, 1919, by representatives of the 
Lusk Committee of the state of New York, files of letters to and from American businessmen, 
representing almost a thousand firms, were unearthed. The British Home Office Directorate of 
Intelligence "Special Report No. 5 (Secret)," issued from Scotland Yard, London, July 14, 1919, 
and written by Basil H. Thompson, was based on this seized material; the report noted: 

. . . Every effort was made from the first by Martens and his associates to arouse the interest 
of American capitalists and there are grounds tot believing that the Bureau has received 
financial support from some Russian export firms, as well as from the Guarantee [sic] Trust 
Company, although this firm has denied the allegation that it is financing Martens' 

It was noted by Thompson that the monthly rent of the Soviet Bureau offices was $300 and the 
office salaries came to about $4,000. Martens' funds to pay these bills came partly from Soviet 
couriers — such as John Reed and Michael Gruzenberg — who brought diamonds from Russia for 
sale in the U.S., and partly from American business firms, including the Guaranty Trust Company 
of New York. The British reports summarized the files seized by the Lusk investigators from the 
bureau offices, and this summary is worth quoting in full: 

(1) There was an intrigue afoot about the time the President first went to France to get the 
Administration to use Nuorteva as an intermediary with the Russian Soviet Government, 
with a view to bring about its recognition by America. Endeavour was made to bring 
Colonel House into it, and there is a long and interesting letter to Frederick C. Howe, on 
whose support and sympathy Nuorteva appeared to rely. There are other records connecting 
Howe with Martens and Nuorteva. 

(2) There is a file of correspondence with Eugene Debs. 

(3) A letter from Amos Pinchot to William Kent of the U.S. Tariff Commission in an 
envelope addressed to Senator Lenroot, introduces Evans Clark "now in the Bureau of the 
Russian Soviet Republic." "He wants to talk to you about the recognition of Kolchak and the 
raising of the blockade, etc." 

(4) A report to Felix Frankfurter, dated 27th May, 1919 speaks of the virulent campaign 
vilifying the Russian Government. 

(5) There is considerable correspondence between a Colonel and Mrs. Raymond Robbins 
[sic] and Nuorteva, both in 1918 and 1919. In July 1918 Mrs. Robbins asked Nuorteva for 
articles for "Life and Labour," the organ of the National Women's Trade League. In 
February and March, 1919, Nuorteva tried, through Robbins, to get invited to give evidence 
before the Overman Committee. He also wanted Robbins to denounce the Sisson 

(6) In a letter from the Jansen Cloth Products Company, New York, to Nuorteva, dated 
March 30th, 1918, E. Werner Knudsen says that he understands that Nuorteva intends to 
make arrangements for the export of food-stuffs through Finland and he offers his services. 
We have a file on Knudsen, who passed information to and from Germany by way of 

Mexico with regard to British shipping.- 

• • • 

Ludwig Martens, the intelligence report continued, was in touch with all the leaders of "the left" in 
the United States, including John Reed, Ludwig Lore, and Harry J. Boland, the Irish rebel. A 
vigorous campaign against Aleksandr Kolchak in Siberia had been organized by Martens. The 
report concludes: 

[Martens'] organization is a powerful weapon for supporting the Bolshevik cause in the 
United States and... he is in close touch with the promoters of political unrest throughout the 
whole American continent. 

The Scotland Yard list of personnel employed by the Soviet Bureau in New York coincides quite 
closely with a similar list in the Lusk Committee files in Albany, New York, which are today open 
for public inspection.— There is one essential difference between the two lists: the British analysis 
included the name "Julius Hammer" whereas Hammer was omitted from the Lusk Committee 
report.— The British report characterizes Julius Hammer as follows: 

In Julius Hammer, Martens has a real Bolshevik and ardent Left Wing adherent, who came 
not long ago from Russia. He was one of the organizers of the Left Wing movement in New 
York, and speaks at meetings on the same platform with such Left Wing leaders as Reed, 
Hourwich, Lore and Larkin. 

There also exists other evidence of Hammer's work in behalf of the Soviets. A letter from National 
City Bank, New York, to the U.S. Treasury Department stated that documents received by the bank 
from Martens were "witnessed by a Dr. Julius Hammer for the Acting Director of the Financial 
Department" of the Soviet Bureau.— 

The Hammer family has had close ties with Russia and the Soviet regime from 1917 to the present. 
Armand Hammer is today able to acquire the most lucrative of Soviet contracts. Jacob, grandfather 
of Armand Hammer, and Julius were born in Russia. Armand, Harry, and Victor, sons of Julius, 
were born in the United States and are U.S. citizens. Victor was a well-known artist; his son — also 
named Armand — and granddaughter are Soviet citizens and reside in the Soviet Union. Armand 
Hammer is chairman of Occidental Petroleum Corporation and has a son, Julian, who is director of 
advertising and publications for Occidental Petroleum. 

Julius Hammer was a prominent member and financier of the left wing of the Socialist Party. At its 
1919 convention Hammer served with Bertram D. Wolfe and Benjamin Gitlow on the steering 
committee that gave birth to the Communist Party of the U.S. 

In 1920 Julius Hammer was given a sentence of three-and-one-half to fifteen years in Sing Sing for 
criminal abortion. Lenin suggested — with justification — that Julius was "imprisoned on the 
charge of practicing illegal abortions but in fact because of communism."— Other U.S. Communist 
Party members were sentenced to jail for sedition or deported to the Soviet Union. Soviet 
representatives in the United States made strenuous but unsuccessful efforts to have Julius and his 
fellow party members released. 

Another prominent member of the Soviet Bureau was the assistant secretary, Kenneth Durant, a 
former aide to Colonel House. In 1920 Durant was identified as a Soviet courier. Appendix 3 
reproduces a letter to Kenneth Durant that was seized by the U.S. Department of Justice in 1920 and 
that describes Durant's close relationship with the Soviet hierarchy. It was inserted into the record 
of a House committee's hearings in 1920, with the following commentary: 

MR. NEWTON: It is a mailer of interest to this committee to know what was the nature of 
that letter, and I have a copy of the letter that I Want inserted in the record in connection 
with the witness' testimony. MR. Mason: That letter has never been shown to the witness. 

He said that he never saw the letter, and had asked to see it, and that the department had 

• • • 

refused to show it to him. We would not put any witness on the stand and ask him to testify 
to a letter without seeing it. 

MR. NEWTON: The witness testified that he has such a letter, and he testified that they 
found it in his coat in the trunk, I believe. That letter was addressed to a Mr. Kenneth 
Durant, and that letter had within it another envelope which was likewise sealed. They were 
opened by the Government officials and a photostatic copy made. The letter, I may say, is 
signed by a man by the name of "Bill. " It refers specifically to soviet moneys on deposit in 
Christiania, Norway, a portion of which they waist turned over here to officials of the soviet 
government in this country.— 

Kenneth Durant, who acted as Soviet courier in the transfer of funds, was treasurer lot the Soviet 
Bureau and press secretary and publisher of Soviet Russia, the official organ of the Soviet Bureau. 
Durant came from a well-to-do Philadelphia family. He spent most of his life in the service of the 
Soviets, first in charge of publicity work at the Soviet Bureau then from 1923 to 1944 as manager of 
the Soviet Tass bureau in the United States. J. Edgar Hoover described Durant as "at all times . . . 
particularly active in the interests of Martens and of the Soviet government."— 

Felix Frankfurter — later justice of the Supreme Courts — was also prominent in the Soviet Bureau 
files. A letter from Frankfurter to Soviet agent Nuorteva is reproduced in Appendix 3 and suggests 
that Frankfurter had some influence with the bureau. 

In brief, the Soviet Bureau could not have been established without influential assistance from 
within the United States. Part of this assistance came from specific influential appointments to the 
Soviet Bureau staff and part came from business firms outside the bureau, firms that were reluctant 
to make their support publicly known. 


On February 1, 1920, the front page of the New York Times carried a boxed notation stating that 
Martens was to be arrested and deported to Russia. At the same time Martens was being sought as a 
witness to appear before a subcommittee of the Senate Foreign Relations Committee investigating 
Soviet activity in the United States. After lying low for a few days Martens appeared before the 
committee, claimed diplomatic privilege, and refused to give up "official" papers in his possession. 
Then after a flurry of publicity, Martens "relented," handed over his papers, and admitted to 
revolutionary activities in the United States with the ultimate aim of overthrowing the capitalist 

Martens boasted to the news media and Congress that big corporations, the Chicago packers among 
them, were aiding the Soviets: 

Affording to Martens, instead of farthing on propaganda among the radicals and the 
proletariat he has addressed most of his efforts to winning to the side of Russia the big 
business and manufacturing interests of this country, the packers, the United States Steel 
Corporation, the Standard Oil Company and other big concerns engaged in international 
trade. Martens asserted that most of the big business houses of the country were aiding him 
in his effort to get the government to recognize the Soviet government.— 

This claim was expanded by A. A. Heller, commercial attache at the Soviet Bureau: 

"Among the people helping us to get recognition from the State Department are the big Chit 

ago packers, Armour, Swift, Nelson Morris and Cudahy Among the other firms are . . . 

the American Steel Export Company, the Lehigh Machine Company, the Adrian Knitting 


Company, the International Harvester Company, the Aluminum Goods Manufacturing 
Company, the Aluminum Company of America, the American Car and Foundry Export 
Company, M.C.D. Borden & Sons." n 

The New York Times followed up these claims and reported comments of the firms named. "I have 
never heard of this man [Martens] before in my life," declared G. F. Swift, Jr., in charge of the 
export department of Swift & Co. "Most certainly I am sure that we have never had any dealings 
with him of any kind."— The Times added that O. H. Swift, the only other member of the firm that 
could be contacted, "also denied any knowledge whatever of Martens or his bureau in New York." 
The Swift statement was evasive at best. When the Lusk Committee investigators seized the Soviet 
Bureau files, they found correspondence between the bureau and almost all the firms named by 
Martens and Heller. The "list of firms that offered to do business with Russian Soviet Bureau," 
compiled from these files, included an entry (page 16), "Swift and Company, Union Stock Yards, 
Chicago, 111." In other words, Swift had been in communication with Martens despite its denial to 
the New York Times. 

The New York Times contacted United States Steel and reported, "Judge Elbert H. Gary said last 
night that there was no foundation for the statement with the Soviet representative here had had any 
dealings with the United States Steel Corporation." This is technically correct. The United States 
Steel Corporation is not listed in the Soviet files, but the list does contain (page 16) an affiliate, 
"United States Steel Products Co., 30 Church Street, New York City." 

The Lusk Committee list records the following about other firms mentioned by Martens and Heller: 
Standard Oil — not listed. Armour 8c Co., meatpackers — listed as "Armour Leather" and "Armour 
& Co. Union Stock Yards, Chicago." Morris Go., meatpackers, is listed on page 13. Cudahy — 
listed on page 6. American Steel Export Co. — listed on page 2 as located at the Woolworth 
Building; it had offered to trade with the USSR. Lehigh Machine Co. — not listed. Adrian Knitting 
Co. — listed on page 1 . International Harvester Co. — listed on page 1 1 . Aluminum Goods 
Manufacturing Co. — listed on page 1. Aluminum Company of America — not listed. American 
Car and Foundry Export — the closest listing is "American Car Co. — Philadelphia." M.C.D. 
Borden 8c Sons — listed as located at 90 Worth Street, on page 4. 

Then on Saturday, June 21, 1919, Santeri Nuorteva (Alexander Nyberg) confirmed in a press 
interview the role of International Harvester: 

Q: [by New York Times reporter]: What is your business? 

A: Purchasing director tot Soviet Russia. 

Q: What did you do to accomplish this? 

A: Addressed myself to American manufacturers. 

Q: Name them. 

A: International Harvester Corporation is among them. 

Q: Whom did you see? 

A: Mr. Koenig. 

Q: Did you go to see him? 

A: Yes. 

• • • 

Q: Give more names. 

A: I went to see so many, about 500 people and I can't remember all the names. We have 
files in the office disclosing them 


In brief, the claims by Heller and Martens relating to their widespread contacts among certain U.S. 


firms— were substantiated by the office files of the Soviet Bureau. On the other hand, for their own 
good reasons, these firms appeared unwilling to confirm their activities. 


In addition to Guaranty Trust and the private banker Boissevain in New York, some European 
bankers gave direct help to maintain and expand the Bolshevik hold on Russia. A 1918 State 
Department report from our Stockholm embassy details these financial transfers. The department 
commended its author, stating that his "reports on conditions in Russia, the spread of Bolshevism in 
Europe, and financial questions . . . have proved most helpful to the Department. Department is 
much gratified by your capable handling of the legation's business."— According to this report, one 
of these "Bolshevik bankers" acting in behalf of the emerging Soviet regime was Dmitri 
Rubenstein, of the former Russo-French bank in Petrograd. Rubenstein, an associate of the 
notorious Grigori Rasputin, had been jailed in prerevolutionary Petrograd in connection with the 
sale of the Second Russian Life Insurance Company. The American manager and director of the 
Second Russian Life Insurance Company was John MacGregor Grant, who was located at 120 
Broadway, New York City. Grant was also the New York representative of Putiloff s Banque 
Russo-Asiatique. In August 1918 Grant was (for unknown reasons) listed on the Military 
Intelligence Bureau "suspect list."— This may have occurred because Olof Aschberg in early 1918 
reported opening a foreign credit in Petrograd "with the John MacGregor Grant Co., export concern, 
which it [Aschberg] finances in Sweden and which is financed in America by the Guarantee [sic] 
Trust Co."— After the revolution Dmitri Rubenstein moved to Stockholm and became financial 
agent for the Bolsheviks. The State Department noted that while Rubenstein was "not a Bolshevik, 
he has been unscrupulous in moneT making, and it is suspected that he may be making the 
contemplated visit to America in Bolshevik interest and for Bolshevik pay.— 

Another Stockholm "Bolshevik banker" was Abram Givatovzo, brother-in-law of Trotsky and Lev 
Kamenev. The State Department report asserted that while Givatovzo pretended to be "very anti- 
Bolshevik," he had in fact received "large sums" of moneT' from the Bolsheviks by courier for 
financing revolutionary operations. Givatovzo was part of a syndicate that included Denisoff of the 
former Siberian bank, Kamenka of the Asoff Don Bank, and Davidoff of the Bank of Foreign 
Commerce. This syndicate sold the assets of the former Siberian Bank to the British government. 

Yet another tsarist private banker, Gregory Lessine, handled Bolshevik business through the firm of 
Dardel and Hagborg. Other "Bolshevik bankers" named in the report are stirrer and Jakob Berline, 
who previously controlled, through his wife, the Petrograd Nelkens Bank. Isidor Kon was used by 
these bankers as an agent. 

The most interesting of these Europe-based bankers operating in behalf of the Bolsheviks was 
Gregory Benenson, formerly chairman in Petrograd of the Russian and English Bank — a bank 
which included on its board of directors Lord Balfour (secretary of state for foreign affairs in 
England) and Sir I. M. F£. Amory, as well as S. F£. Cripps and Ff. Guedalla. Benenson traveled to 
Petrograd after the revolution, then on to Stockholm. He came, said one State Department official, 
"bringing to my knowledge ten million rubles with him as he offered them to me at a high price for 
the use of our Embassy Archangel." Benenson had an arrangement with the Bolsheviks to exchange 
sixty million rubles for £1.5 million sterling. 

• • • 

In January 1919 the private bankers in Copenhagen that were associated with Bolshevik institutions 
became alarmed by rumors that the Danish political police had marked the Soviet legation and those 
persons in contact with the Bolsheviks for expulsion from Denmark. These bankers and the legation 
hastily attempted to remove their funds from Danish banks — in particular, seven million rubles 
from the Revisionsbanken.— Also, confidential documents were hidden in the offices of the Martin 
Larsen Insurance Company. 

Consequently, we can identify a pattern of assistance by capitalist bankers for the Soviet Union. 
Some of these were American bankers, some were tsarist bankers who were exiled and living in 
Europe, and some were European bankers. Their common objective was profit, not ideology. 

The questionable aspects of the work of these "Bolshevik bankers," as they were called, arises from 
the framework of contemporary events in Russia. In 1919 French, British, and American troops 
were fighting Soviet troops in the Archangel region. In one clash in April 1919, for example, 
American casualties were one officer, .five men killed, and nine missing.— Indeed, at one point in 
1919 General Tasker H. Bliss, the U.S. commander in Archangel, affirmed the British statement 
that "Allied troops in the Murmansk and Archangel districts were in danger of extermination unless 
they were speedily reinforced."— Reinforcements were then on the way under the command of 
Brigadier General W. P. Richardson. 

In brief, while Guaranty Trust and first-rank American firms were assisting the formation of the 
Soviet Bureau in New York, American troops were in conflict with Soviet troops in North Russia. 
Moreover, these conflicts were daily reported in the New York Times, presumably read by these 
bankers and businessmen. Further, as we shall see in chapter ten, the financial circles that were 
supporting the Soviet Bureau in New York also formed in New York the "United Americans" — a 
virulently anti-Communist organization predicting bloody revolution, mass starvation, and panic in 
the streets of New York. 


! Copy in U.S. State Dept. Decimal File, 316-22-656. 

2 Ibid., 861.00/1970. 

3 U.S., House, Committee on Foreign Affairs, Conditions in Russia, 66th Cong., 3d sess., 
1921, p. 78. 

4 U.S. State Dept. Decimal File, 316-19-1120. 

5 Ibid. 

6 See Benjamin Gitlow, [U.S., House, Un-American Propaganda Activities (Washington, 
1939), vols. 7-8, p. 4539. 

7 Seep. 119. 

8 Copy in [U.S. State Dept. Decimal File, 316-22-656. Confirmation of Guaranty Trust 
involvement tomes in later intelligence reports. 

9 On Frederick C. Howe see pp. 16, 177, for an early statement of the manner in which 
financiers use society and its problems for their own ends; on Felix Frankfurter, later 

• • • 

Supreme Court justice, see Appendix 3 for an early Frankfurter letter to Nuorteva; on 
Raymond Robins see p. 100. 

10 The Lusk Committee list of personnel in the Soviet Bureau is printed in Appendix 3. The 
list includes Kenneth Durant, aide to Colonel House; Dudley Field Malone, appointed by 
President Wilson as collector of customs for the Port of New York; and Morris Hillquit, the 
financial intermediary between New York banker Eugene Boissevain on the one hand, and 
John Reed and Soviet agent Michael Gruzenberg on the other. 

11 Julius Hammer was the father of Armand Hammer, who today is chairman of the 
Occidental Petroleum Corp. of Los Angeles. 

12 See Appendix 3. 

13 V. I. Lenin, Polnoe Sobranie Sochinenii, 5th ed. (Moscow, 1958), 53:267. 

U.S., House, Committee, on Foreign Affairs, Conditions in Russia, 66th Cong., 3d sess., 
1921, p. 75. "Bill" was William Bobroff, Soviet agent. 

15 Ibid., p. 78. 

l6 New York Times, November 17, 1919. 

17 Ibid. 

18 Ibid. 

l9 New York Times, June 21,1919. 


Seep. 119. 

21 U.S. State Dept. Decimal File, 861.51/411, November 23, 1918. 

22 Ibid., 316-125-1212. 

23 U.S., Department of State, Foreign Relations o! the United States: 1918, Russia, 1:373. 

24 U.S. State Dept. Decimal File, 861.00/4878, July,* 21, 1919. 

25 Ibid., 316-21-115/21. 

26 New York Times, April 5, 1919. 

27 Ibid. 

• • • 

Chapter VIII 


William B. Thompson, who was in Petrograd from July until November last, has made 
a personal contribution of $1,000,000 to the Bolsheviki for the purpose of spreading 
their doctrine in Germany and Austria .... 

Washington Post, February 2, 1918 

While collecting material for this book a single location and address in the Wall Street area came to 
the fore — 120 Broadway, New York City. Conceivably, this book could have been written 
incorporating only persons, firms, and organizations located at 120 Broadway in the year 1917. 
Although this research method would have been forced and unnatural, it would have excluded only 
a relatively small segment of the story. 

The original building at 120 Broadway was destroyed by fire before World War I. Subsequently the 
site was sold to the Equitable Office Building Corporation, organized by General T. Coleman du 
Pont, president of du Pont de Nemours Powder Company. 1 A new building was completed in 1915 
and the Equitable Life Assurance Company moved back to its old site.- In passing we should note 
an interesting interlock in Equitable history. In 1916 the cashier of the Berlin Equitable Life office 
was William Schacht, the father of Hjalmar Horace Greeley Schacht — later to become Hitler's 
banker, and financial genie. William Schacht was an American citizen, worked thirty years for 
Equitable in Germany, and owned a Berlin house known as "Equitable Villa." Before joining Hitler, 
young Hjalmar Schacht served as a member of the Workers and Soldiers Council (a soviet) of 
Zehlendoff; this he left in 1918 to join the board of the Nationalbank fur Deutschland. His 
codirector at DONAT was Emil Wittenberg, who, with Max May of Guaranty Trust Company of 
New York, was a director of the first Soviet international bank, Ruskombank. 

In any event, the building at 120 Broadway was in 1917 known as the Equitable Life Building. A 
large building, although by no means the largest office building in New York City, it occupies a 
one-block area at Broadway and Pine, and has thirty-four floors. The Bankers Club was located on 
the thirty-fourth floor. The tenant list in 1917 in effect reflected American involvement in the 
Bolshevik Revolution and its aftermath. For example, the headquarters of the No. 2 District of the 
Federal Reserve System — the New York area — by far the most important of the Federal Reserve 
districts, was located at 120 Broadway. The offices of several individual directors of the Federal 
Reserve Bank of New York and, most important, the American International Corporation were also 
at 120 Broadway. By way of contrast, Ludwig Martens, appointed by the Soviets as the first 
Bolshevik "ambassador" to the United States and head of the Soviet Bureau, was in 1917 the vice 
president of Weinberg & Posner — and also had offices at 120 Broadway.* 

Is this concentration an accident? Does the geographical contiguity have any significance? Before 
attempting to suggest an answer, we have to switch our frame of reference and abandon the left- 
right spectrum of political analysis. 

With an almost unanimous lack of perception the academic world has described and analyzed 
international political relations in the context of an unrelenting conflict between capitalism and 
communism, and rigid adherence to this Marxian formula has distorted modern history. Tossed out 
from time to time are odd remarks to the effect that the polarity is indeed spurious, but these are 
quickly dispatched to limbo. For example, Carroll Quigley, professor of international relations at 
Georgetown University, made the following comment on the House of Morgan: 

• • • 

More than fifty years ago the Morgan firm decided to infiltrate the Left-wing political 
movements in the United States. This was relatively easy to do, since these groups were 
starved for funds and eager for a voice to reach the people. Wall Street supplied both. The 
purpose was not to destroy, dominate or take over...- 

Professor Quigley's comment, apparently based on confidential documentation, has all the 
ingredients of an historical bombshell if it can be supported. We suggest that the Morgan firm 
infiltrated not only the domestic left, as noted by Quigley, but also the foreign left — that is, the 
Bolshevik movement and the Third International. Even further, through friends in the U.S. State 
Department, Morgan and allied financial interests, particularly the Rockefeller family, have exerted 
a powerful influence on U.S. -Russian relations from World War I to the present. The evidence 
presented in this chapter will suggest that two of the operational vehicles for infiltrating or 
influencing foreign revolutionary movements were located at 120 Broadway: the first, the Federal 
Reserve Bank of New York, heavily laced with Morgan appointees; the second, the Morgan- 
controlled American International Corporation. Further, there was an important interlock between 
the Federal Reserve Bank of New York and the American International Corporation — C. A. Stone, 
the president of American International, was also a director of the Federal Reserve Bank. 

The tentative hypothesis then is that this unusual concentration at a single address was a reflection 
of purposeful actions by specific firms and persons and that these actions and events cannot be 
analyzed within the usual spectrum of left-right political antagonism. 


The American International Corporation (AIC) was organized in New York on November 22, 1915, 
by the J.P. Morgan interests, with major participation by Stillman's National City Bank and the 
Rockefeller interests. The general office of AIC was at 120 Broadway. The company's charter 
authorized it to engage in any kind of business, except banking and public utilities, in any country 
in the world. The stated purpose of the corporation was to develop domestic and foreign enterprises, 
to extend American activities abroad, and to promote the interests of American and foreign bankers, 
business and engineering. 

Frank A. Vanderlip has described in his memoirs how American International was formed and the 
excitement created on Wall Street over its business potential.- The original idea was generated by a 
discussion between Stone & Webster — the international railroad contractors who "were convinced 
there was not much more railroad building to be done in the United States" — and Jim Perkins and 
Frank A. Vanderlip of National City Bank (NCB).- The original capital authorization was $50 
million and the board of directors represented the leading lights of the New York financial world. 
Vanderlip records that he wrote as follows to NCB president Stillman, enthusing over the enormous 
potential for American International Corporation: 

James A. Farrell and Albert Wiggin have been invited [to be on the board] but had to consult 
their committees before accepting. I also have in mind asking Henry Walters and Myron T. 
Herrick. Mr. Herrick is objected to by Mr. Rockefeller quite strongly but Mr. Stone wants 
him and I feel strongly that he would be particularly desirable in France. The whole thing 
has gone along with a smoothness that has been gratifying and the reception of it has been 
marked by an enthusiasm which has been surprising to me even though I was so strongly 
convinced we were on the right track. 

I saw James J. Hill today, for example. He said at first that he could not possibly think of 
extending his responsibilities, but after I had finished telling him what we expected to do, he 
said he would be glad to go on the board, would take a large amount of stock and 

• • • 

particularly wanted a substantial interest in the City Bank and commissioned me to buy him 
the stock at the market. 

I talked with Ogden Armour about the matter today for the first time. He sat in perfect 
silence while I went through the story, and, without asking a single question, he said he 
would go on the board and wanted $500,000 stock. 

Mr. Coffin [of General Electric] is another man who is retiring from everything, but has 
'become so enthusiastic over this that he was willing to go on the board, and offers the most 
active cooperation. 

I felt very good over getting Sabin. The Guaranty Trust is altogether the most active 
competitor we have in the field and it is of great value to get them into the fold in this way. 
They have been particularly enthusiastic at Kuhn, Loeb's. They want to take up to 
$2,500,000. There was really quite a little competition to see who should get on the board, 
but as I had happened to talk with Kahn and had invited him first, it was decided he should 
go on. He is perhaps the most enthusiastic of any one. They want half a million stock for Sir 
Ernest Castle^l to whom they have cabled the plan and they have back from him approval 

I explained the whole matter to the Board [of the City Bank] Tuesday and got nothing but 
favorable comments.- 

Everybody coveted the AIC stock. Joe Grace (of W. R. Grace & Co.) wanted $600,000 in addition 
to his interest in National City Bank. Ambrose Monell wanted $500,000. George Baker wanted 
$250,000. And "William Rockefeller tried, vainly, to get me to put him down for $5,000,000 of the 

By 1916 AIC investments overseas amounted to more than $23 million and in 1917 to more than 
$27 million. The company established representation in London, Paris, Buenos Aires, and Peking as 
well as in Petrograd, Russia. Less than two years after its formation AIC was operating on a 
substantial scale in Australia, Argentina, Uruguay, Paraguay, Colombia, Brazil, Chile, China, Japan, 
India, Ceylon, Italy, Switzerland, France, Spain, Cuba, Mexico, and other countries in Central 

American International owned several subsidiary companies outright, had substantial interests in yet 
other companies, and operated still other firms in the United States and abroad. The Allied 
Machinery Company of America was founded in February 1916 and the entire share capital taken 
up by American International Corporation. The vice president of American International 
Corporation was Frederick Holbrook, an engineer and formerly head of the Holbrook Cabot & 
Rollins Corporation. In January 1917 the Grace Russian Company was formed, the joint owners 
being W. R. Grace & Co. and the San Galli Trading Company of Petrograd. American International 
Corporation had a substantial investment in the Grace Russian Company and through Holbrook an 
interlocking directorship. 

AIC also invested in United Fruit Company, which was involved in Central American revolutions 
in the 1920s. The American International Shipbuilding Corporation was wholly owned by AIC and 
signed substantial contracts for war vessels with the Emergency Fleet Corporation: one contract 
called for fifty vessels, followed by another contract for forty vessels, followed by yet another 
contract for sixty cargo vessels. American International Shipbuilding was the largest single 
recipient of contracts awarded by the U.S. government Emergency Fleet Corporation. Another 
company operated by AIC was G. Amsinck & Co., Inc. of New York; control of the company was 
acquired in November 1917. Amsinck was the source of financing for German espionage in the 
United States (see page 66). In November 1917 the American International Corporation formed and 


wholly owned the Symington Forge Corporation, a major government contractor for shell forgings. 
Consequently, American International Corporation had significant interest in war contracts within 
the United States and overseas. It had, in a word, a vested interest in the continuance of World War 

The directors of American International and some of their associations were (in 1917): 

J. OGDEN ARMOUR Meatpacker, of Armour & Company, Chicago; director of the 
National City Bank of New York; and mentioned by A. A. Heller in connection with the 
Soviet Bureau (see p. 119). 

GEORGE JOHNSON BALDWIN Of Stone & Webster, 120 Broadway. During World War 
I Baldwin was chairman of the board of American International Shipbuilding, senior vice 
president of American International Corporation, director of G. Amsinck (Von Pavenstedt of 
Amsinck was a German espionage paymaster in the U.S., see page 65), and a trustee of the 
Carnegie Foundation, which financed the Marburg Plan for international socialism to be 
controlled behind the scenes by world finance (see page 174-6). 

C. A. COFFIN Chairman of General Electric (executive office: 120 Broadway), chairman of 
cooperation committee of the American Red Cross. 

W. E. COREY (14 Wall Street) Director of American Bank Note Company, Mechanics and 
Metals Bank, Midvale Steel and Ordnance, and International Nickel Company; later director 
of National City Bank. 

ROBERT DOLLAR San Francisco shipping magnate, who attempted in behalf of the 
Soviets to import tsarist gold rubles into U.S. in 1920, in contravention of U.S. regulations. 

PIERRE S. DU PONT Of the du Pont family. 

PHILIP A. S. FRANKLIN Director of National City Bank. 

J.P. GRACE Director of National City Bank. 

R. F. HERRICK Director, New York Life Insurance; former president of the American 
Bankers Association; trustee of Carnegie Foundation. 

OTTO H. KAHN Partner in Kuhn, Loeb. Kahn's father came to America in 1948, "having 
taken part in the unsuccessful German revolution of that year." According to J. H. Thomas 
(British socialist, financed by the Soviets), "Otto Kahn's face is towards the light." 

H. W. PRITCHETT Trustee of Carnegie Foundation. 

PERCY A. ROCKEFELLER Son of John D. Rockefeller; married to Isabel, daughter of J. 
A. Stillman of National City Bank. 

JOHN D. RYAN Director of copper-mining companies, National City Bank, and Mechanics 
and Metals Bank. (See frontispiece to this book.) 

W. L. SAUNDERS Director the Federal Reserve Bank of New York, 120 Broadway, and 
chairman of Ingersoll-Rand. According to the National Cyclopaedia (26:81): "Throughout 
the war he was one of the President's most trusted advisers." See page 15 for his views on 
the Soviets. 

• • • 

J. A. STILLMAN President of National City Bank, after his father (J. Stillman, chairman of 
NCB) died in March 1918. 

C. A. STONE Director (1920-22) of Federal Reserve Bank of New York, 120 Broadway; 
chairman of Stone & Webster, 120 Broadway; president (1916-23) of American 
International Corporation, 120 Broadway. 

T. N. VAIL President of National City Bank of Troy, New York 

F. A. VANDERLIP President of National City Bank. 

E. S. WEBSTER Of Stone & Webster, 120 Broadway. 

A. H. WIGGIN Director of Federal Reserve Bank of New York in the early 1930s. 

BECKMAN WINTHROPE Director of National City Bank. 

WILLIAM WOODWARD Director of Federal Reserve Bank of New York, 120 Broadway, 
and Hanover National Bank. 

The interlock of the twenty-two directors of American International Corporation with other 
institutions is significant. The National City Bank had no fewer than ten directors on the board of 
AIC; Stillman of NCB was at that time an intermediary between the Rockefeller and Morgan 
interests, and both the Morgan and the Rockefeller interests were represented directly on AIC. 
Kuhn, Loeb and the du Ponts each had one director. Stone & Webster had three directors. No fewer 
than four directors of AIC (Saunders, Stone, Wiggin, Woodward) either were directors of or were 
later to join the Federal Reserve Bank of New York. We have noted in an earlier chapter that 
William Boyce Thompson, who contributed funds and his considerable prestige to the Bolshevik 
Revolution, was also a director of the Federal Reserve Bank of New York — the directorate of the 
FRB of New York comprised only nine members. 


Having identified the directors of AIC we now have to identify their revolutionary influence. 

As the Bolshevik Revolution took hold in central Russia, Secretary of State Robert Lansing 
requested the views of American International Corporation on the policy to be pursued towards the 
Soviet regime. On January 16, 1918 — barely two months after the takeover in Petrograd and 
Moscow, and before a fraction of Russia had come under Bolshevik control — William Franklin 
Sands, executive secretary of American International Corporation, submitted the requested 
memorandum on the Russian political situation to Secretary Lansing. Sands covering letter, headed 
120 Broadway, began: 

To the Honourable January 16, 1918 

Secretary of State 
Washington D.C. 


I have the honor to enclose herewith the memorandum which you requested me to make for 
you on my view of the political situation in Russia. 

• • • 

I have separated it into three parts; an explanation of the historical causes of the Revolution, 
told as briefly as possible; a suggestion as to policy and a recital of the various branches of 
American activity at work now in Russia ....- 

Although the Bolsheviks had only precarious control in Russia — and indeed were to come near to 
losing even this in the spring of 1918 — Sands wrote that already (January 1918) the United States 
had delayed too long in recognizing "Trotzky." He added, "Whatever ground may have been lost, 
should be regained now, even at the cost of a slight personal triumph for Trotzky. "- 

Firms located at, or near, 120 Broadway: 

American International Corp 120 Broadway 

National City Bank 55 Wall Street 

Bankers Trust Co Bldg 14 Wall Street 

New York Stock Exchange 13 Wall Street/ 12 Broad 

Morgan Building corner Wall & Broad 

Federal Reserve Bank of NY 120 Broadway 

Equitable Building 120 Broadway 

Bankers Club 120 Broadway 

Simpson, Thather & Bartlett 62 Cedar St 

William Boyce Thompson 14 Wall Street 

Hazen, Whipple & Fuller 42nd Street Building 

Chase National Bank 57 Broadway 

McCann Co 61 Broadway 

Stetson, Jennings & Russell 15 Broad Street 

Guggenheim Exploration 120 Broadway 

Weinberg & Posner 120 Broadway 

Soviet Bureau 110 West 40th Street 

John MacGregor Grant Co 120 Broadway 

Stone & Webster 120 Broadway 

General Electric Co 120 Broadway 

Morris Plan of NY 120 Broadway 

Sinclair Gulf Corp 120 Broadway 

Guaranty Securities 120 Broadway 

Guaranty Trust 140 Broadway 

• • • 


i — i 

Map of Wall Street Area Showing Office Locations 

Sands then elaborates the manner in which the U.S. could make up for lost time, parallels the 
Bolshevik Revolution to "our own revolution," and concludes: "I have every reason to believe that 
the Administration plans for Russia will receive all possible support from Congress, and the hearty 
endorsement of public opinion in the United States." 

In brief, Sands, as executive secretary of a corporation whose directors were the most prestigious on 
Wall Street, provided an emphatic endorsement of the Bolsheviks and the Bolshevik Revolution, 
and within a matter of weeks after the revolution started. And as a director of the Federal Reserve 
Bank of New York, Sands had just contributed $1 million to the Bolsheviks — such endorsement of 
the Bolsheviks by banking interests is at least consistent. 

Moreover, William Sands of American International was a man with truly uncommon connections 
and influence in the State Department. 

Sands' career had alternated between the State Department and Wall Street, In the late nineteenth 
and early twentieth century he held various U.S. diplomatic posts. In 1910 he left the department to 
join the banking firm of James Speyer to negotiate an Ecuadorian loan, and for the next two years 
represented the Central Aguirre Sugar Company in Puerto Rico. In 1916 he was in Russia on "Red 
Cross work" — actually a two-man "Special Mission" with Basil Miles — and returned to join the 
American International Corporation in New York 


In early 1918 Sands became the known and intended recipient of certain Russian "secret treaties." If 
the State Department files are to be believed, it appears that Sands was also a courier, and that he 
had some prior access to official documents — prior, that is, to U.S. government officials. On 
January 14, 1918, just two days before Sands wrote his memo on policy towards the Bolsheviks, 
Secretary Lansing caused the following cable to be sent in Green Cipher to the American legation in 
Stockholm: "Important official papers for Sands to bring here were left at Legation. Have you 
forwarded them? Lansing." The reply of January 16 from Morris in Stockholm reads: "Your 460 
January 14, 5 pm. Said documents forwarded Department in pouch number 34 on December 28th." 
To these documents is attached another memo, signed "BM" (Basil Miles, an associate of Sands): 

• • • 

"Mr. Phillips. They failed to give Sands 1st installment of secret treaties wh. [which] he brought 
from Petrograd to Stockholm."— 

Putting aside the question why a private citizen would be carrying Russian secret treaties and the 
question of the content of such secret treaties (probably an early version of the so-called Sisson 
Documents), we can at least deduce that the AIC executive secretary traveled from Petrograd to 
Stockholm in late 1917 and must indeed have been a privileged and influential citizen to have 
access to secret treaties.— 

A few months later, on July 1, 1918, Sands wrote to Treasury Secretary McAdoo suggesting a 
commission for "economic assistance to Russia." He urged that since it would be difficult for a 
government commission to "provide the machinery" for any such assistance, "it seems, therefore, 
necessary to call in the financial, commercial and manufacturing interest of the United States to 
provide such machinery under the control of the Chief Commissioner or whatever official is 
selected by the President for this purpose."— In other words, Sands obviously intended that any 
commercial exploitation of Bolshevik Russia was going to include 120 Broadway. 


The certification of incorporation of the Federal Reserve Bank of New York was filed May 18, 
1914. It provided for three Class A directors representing member banks in the district, three Class 
B directors representing commerce, agriculture, and industry, and three Class C directors 
representing the Federal Reserve Board. The original directors were elected in 1914; they proceeded 
to generate an energetic program. In the first year of organization the Federal Reserve Bank of New 
York held no fewer than 50 meetings. 

From our viewpoint what is interesting is the association between, on the one hand, the directors of 
the Federal Reserve Bank (in the New York district) and of American International Corporation, 
and, on the other, the emerging Soviet Russia. 

In 1917 the three Class A directors were Franklin D. Locke, William Woodward, and Robert H. 
Treman. William Woodward was a director of American International Corporation (120 Broadway) 
and of the Rockefeller-controlled Hanover National Bank. Neither Locke nor Treman enters our 
story. The three Class B directors in 1917 were William Boyce Thompson, Henry R. Towne, and 
Leslie R. Palmer. We have already noted William B. Thompson's substantial cash contribution to 
the Bolshevik cause. Henry R. Towne was chairman of the board of directors of the Morris Plan of 
New York, located at 120 Broadway; his seat was later taken by Charles A. Stone of American 
International Corporation (120 Broadway) and of Stone & Webster (120 Broadway). Leslie R. 
Palmer does not come into our story. The three Class C directors were Pierre Jay, W. L. Saunders, 
and George Foster Peabody. Nothing is known about Pierre Jay, except that his office was at 120 
Broadway and he appeared to be significant only as the owner of Brearley School, Ltd. William 
Lawrence Saunders was also a director of American International Corporation; he openly avowed, 
as we have seen, pro-Bolshevik sympathies, disclosing them in a letter to President Woodrow 
Wilson (see page 15). George Foster Peabody was an active socialist (see page 99-100). 

In brief, of the nine directors of the Federal Reserve Bank of New York, four were physically 
located at 120 Broadway and two were then connected with American International Corporation. 
And at least four members of AIC's board were at one time or another directors of the FRB of New 
York. We could term all of this significant, but regard it not necessarily as a dominant interest. 

• • • 


William Franklin Sands' proposal for an economic commission to Russia was not adopted. Instead, 
a private vehicle was put together to exploit Russian markets and the earlier support given the 
Bolsheviks. A group of industrialists from 120 Broadway formed the American-Russian Industrial 
Syndicate Inc. to develop and foster these opportunities. The financial backing for the new firm 
came from the Guggenheim Brothers, 120 Broadway, previously associated with William Boyce 
Thompson (Guggenheim controlled American Smelting and Refining, and the Kennecott and Utah 
copper companies); from Harry F. Sinclair, president of Sinclair Gulf Corp., also 120 Broadway; 
and from James G. White of J. G. White Engineering Corp. of 43 Exchange Place — the address of 
the American-Russian Industrial Syndicate. 

In the fall of 1919 the U.S. embassy in London cabled Washington about Messrs. Lubovitch and 
Rossi "representing American-Russian Industrial Syndicate Incorporated What is the reputation and 
the attitude of the Department toward the syndicate and the individuals?"— 

To this cable State Department officer Basil Miles, a former associate of Sands, replied: 

. . . Gentlemen mentioned together with their corporation are of good standing being backed 
financially by the White, Sinclair and Guggenheim interests for the purpose of opening up 
business relations with Russia.— 

So we may conclude that Wall Street interests had quite definite ideas of the manner in which the 
new Russian market was to be exploited. The assistance and advice proffered in behalf of the 
Bolsheviks by interested parties in Washington and elsewhere were not to remain unrewarded. 


Quite apart from American International's influence in the State Department is its intimate 
relationship — which AIC itself called "control" — with a known Bolshevik: John Reed. Reed was 
a prolific, widely read author of the World War I era who contributed to the Bolshevik-oriented 
Masses.— and to the Morgan-controlled journal Metropolitan. Reed's book on the Bolshevik 
Revolution, Ten Days That Shook the World, sports an introduction by Nikolai Lenin, and became 
Reed's best-known and most widely read literary effort. Today the book reads like a superficial 
commentary on current events, is interspersed with Bolshevik proclamations and decrees, and is 
permeated with that mystic fervor the Bolsheviks know will arouse foreign sympathizers. After the 
revolution Reed became an American member of the executive committee of the Third 
International. He died of typhus in Russia in 1920. 

The crucial issue that presents itself here is not Reed's known pro-Bolshevik tenor and activities, 
but how Reed who had the entire confidence of Lenin ("Here is a book I should like to see 
published in millions of copies and translated into all languages," commented Lenin in Ten Days), 
who was a member of the Third International, and who possessed a Military Revolutionary 
Committee pass (No. 955, issued November 16, 1917) giving him entry into the Smolny Institute 
(the revolutionary headquarters) at any time as the representative of the "American Socialist press," 
was also — despite these things — a puppet under the "control" of the Morgan financial interests 
through the American International Corporation. Documentary evidence exists for this seeming 
conflict (see below and Appendix 3). 

Let's fill in the background. Articles for the Metropolitan and the Masses gave John Reed a wide 
audience for reporting the Mexican and the Russian Bolshevik revolutions. Reed's biographer 
Granville Hicks has suggested, in John Reed, that "he was . . . the spokesman of the Bolsheviks in 
the United States." On the other hand, Reed's financial support from 1913 to 1918 came heavily 


from the Metropolitan — owned by Harry Payne Whitney, a director of the Guaranty Trust, an 
institution cited in every chapter of this book — and also' from the New York private banker and 
merchant Eugene Boissevain, who channeled funds to Reed both directly and through the pro- 
Bolshevik Masses. In other words, John Reed's financial support came from two supposedly 
competing elements in the political spectrum. These funds were for writing and may be classified 
as: payments from Metropolitan from 1913 onwards for articles; payments from Masses from 1913 
onwards, which income at least in part originated with Eugene Boissevain. A third category should 
be mentioned: Reed received some minor and apparently unconnected payments from Red Cross 
commissioner Raymond Robins in Petrograd. Presumably he also received smaller sums for articles 
written for other journals, and book royalties; but no evidence has been found giving the amounts of 
such payments. 


The Metropolitan supported contemporary establishment causes including, for example, war 
preparedness. The magazine was owned by Harry Payne Whitney (1872-1930), who founded the 
Navy League and was partner in the J.P. Morgan firm. In the late 1890s Whitney became a director 
of American Smelting and Refining and of Guggenheim Exploration. Upon his father's death in 
1908, he became a director of numerous other companies, including Guaranty Trust Company. 
Reed began writing for Whitney's Metropolitan in July 1913 and contributed a half-dozen articles 
on the Mexican revolutions: "With Villa in Mexico," "The Causes Behind/Mexico's Revolution," 
"If We Enter Mexico," "With Villa on the March," etc. Reed's sympathies were with revolutionist 
Pancho Villa. You will recall the link (see page 65) between Guaranty Trust and Villa's ammunition 

In any event, Metropolitan was Reed's main source of income. In the words of biographer Granville 
Hicks, "Money meant primarily work for the Metropolitan and incidentally articles and stories for 
other paying magazines." But employment by Metropolitan did not inhibit Reed from writing 
articles critical of the Morgan and Rockefeller interests. One such piece, "At the Throat of the 
Republic" (Masses, July 1916), traced the relationship between munitions industries, the national 
security-preparedness lobby, the interlocking directorates of the Morgan-Rockefeller interest, "and 
showed that they dominated both the preparedness societies and the newly formed American 
International Corporation, organized for the exploitation of backward countries."— 

In 1915 John Reed was arrested in Russia by tsarist authorities, and the Metropolitan intervened 
with the State Department in Reed's behalf. On June 21, 1915, H. J. Whigham wrote Secretary of 
State Robert Lansing informing him that John Reed and Boardman Robinson (also arrested and also 
a contributor to the Masses) were in Russia "with commission from the Metropolitan magazine to 
write articles and to make illustrations in the Eastern field of the War." Whigham pointed out that 
neither had "any desire or authority from us to interfere with the operations of any belligerent 
powers that be." Whigham's letter continues: 

If Mr. Reed carried letters of introduction from Bucharest to people in Galicia of an anti- 
Russian frame of mind I am sure that it was done innocently with the simple intention of 
meeting as many people as possible .... 

Whigham points out to Secretary Lansing that John Reed was known at the White House and had 
given "some assistance" to the administration on Mexican affairs; he concludes: "We have the 
highest regard for Reed's great qualities as a writer and thinker and we are very anxious as regards 
his safety."— The Whigham letter is not, let it be noted, from an establishment journal in support of 
a Bolshevik writer; it is from an establishment journal in support of a Bolshevik writer for the 
Masses and similar revolutionary sheets, a writer who was also the author of trenchant attacks ("The 

• • • 

Involuntary Ethics of Big Business: A Fable for Pessimists," for example) on the same Morgan 
interests that owned Metropolitan. 

The evidence of finance by the private banker Boissevain is incontrovertible. On February 23, 1918, 
the American legation at Christiania, Norway, sent a cable to Washington in behalf of John Reed 
for delivery to Socialist Party leader Morris Hillquit. The cable stated in part: "Tell Boissevain must 
draw on him but carefully." A cryptic note by Basil Miles in the State Department files, dated April 
3, 1918, states, "If Reed is coming home he might as well have money. I understand alternatives are 
ejection by Norway or polite return. If this so latter seems preferable." This protective note is 
followed by a cable dated April 1, 1918, and again from the American legation at Christiania: "John 
Reed urgently request Eugene Boissevain, 29 Williams Street, New York, telegraph care legation 
$300.00."— This cable was relayed to Eugene Boissevain by the State Department on April 3, 1918. 

Reed apparently received his funds and arrived safely back in the United States. The next document 
in the State Department files is a letter to William Franklin Sands from John Reed, dated June 4, 
1918, and written from Crotonon-Hudson, New York. In the letter Reed asserts that he has drawn 
up a memorandum for the State Department, and appeals to Sands to use his influence to get release 
of the boxes of papers brought back from Russia. Reed concludes, "Forgive me for bothering you, 
but I don't know where else to turn, and I can't afford another trip to Washington." Subsequently, 
Frank Polk, acting secretary of state, received a letter from Sands regarding the release of John 
Reed's papers. Sands' letter, dated June 5, 1918, from 120 Broadway, is here reproduced in full; it 
makes quite explicit statements about control of Reed: 


June fifth, 1918 

My dear Mr. Polk: 

I take the liberty of enclosing to you an appeal from John ("Jack") Reed to help him, if 
possible, to secure the release of the papers which he brought into the country with him from 

I had a conversation with Mr. Reed when he first arrived, in which he sketched certain 
attempts by the Soviet Government to initiate constructive development, and expressed the 
desire to place whatever observations he had made or information he had obtained through 
his connection with Leon Trotzky, at the disposal of our Government. I suggested that he 
write a memorandum on this subject for you, and promised to telephone to Washington to 
ask you to give him an interview for this purpose. He brought home with him a mass of 
papers which were taken from him for examination, and on this subject also he wished to 
speak to someone in authority, in order to voluntarily offer an>, information they might 
contain to the Government, and to ask for the release of those which he needed for his 
newspaper and magazine work. 

I do not believe that Mr. Reed is either a "Bolshevik" or a "dangerous anarchist," as I have 
heard him described. He is a sensational journalist, without doubt, but that is all. He is not 
trying to embarrass our Government, and for this reason refused the "protection" which I 
understand was offered to him by Trotzky, when he returned to New York to face the 
indictment against him in the "Masses" trial. He is liked by the Petrograd Bolsheviki, 
however, and, therefore, anything which our police may do which looks like "persecution" 
will be resented in Petrograd, which I believe to be undesirable because unnecessary. He can 
be handled and controlled much better by other means than through the police. 

• • • 

I have not seen the memorandum he gave to Mr. Bullitt — I wanted him to let me see it first 
and perhaps to edit it, but he had not the opportunity to do so. 

I hope that you will not consider me to be intrusive in this matter or meddling with matters 
which do not concern me. I believe it to be wise not to offend the Bolshevik leaders unless 
and until it may become necessary to do so — if it should become necessary — and it is 
unwise to look on every one as a suspicious or even dangerous character, who has had 
friendly relations with the Bolsheviki in Russia. / think it better policy to attempt to use such 
people for our own purposes in developing our policy toward Russia, if it is possible to do 
so. The lecture which Reed was prevented by the police from delivering in Philadelphia (he 
lost his head, came into conflict with the police and was arrested) is the only lecture on 
Russia which I would have paid to hear, if I had not already seen his notes on the subject. It 
covered a subject which we might quite possibly find to be a point of contact with the Soviet 
Government, from which to begin constructive work! 

Can we not use him, instead of embittering him and making him an enemy? He is not well 
balanced, but he is, unless I am very much mistaken, susceptible to discreet guidance and 
might be quite useful. 

Sincerely yours, 
William Franklin Sands 

The Honourable 
Frank Lyon Polk 
Counselor for the Department of State 
Washington, D.C. 



The significance of this document is the hard revelation of direct intervention by an officer 
(executive secretary) of American International Corporation in behalf of a known Bolshevik. 
Ponder a few of Sands' statements about Reed: "He can be handled and controlled much better by 
other means than through the police"; and, "Can we not use him, instead of embittering him and 
making him an enemy? ... he is, unless I am very much mistaken, susceptible to discreet guidance 
and might be quite useful." Quite obviously, the American International Corporation viewed John 
Reed as an agent or a potential agent who could be, and probably had already been, brought under 
its control. The fact that Sands was in a position to request editing a memorandum by Reed (for 
Bullitt) suggests some degree of control had already been established. 

Then note Sands' potentially hostile attitude towards — and barely veiled intent to provoke — the 
Bolsheviks: "I believe it to be wise not to offend the Bolshevik leaders unless and until it may 
become necessary to do so — if it should become necessary . . ." (italics added). 

This is an extraordinary letter in behalf of a Soviet agent from a private U.S. citizen whose counsel 
the State Department had sought, and continued to seek. 

A later memorandum, March 19, 1920, in the State files reported the arrest of John Reed by the 
Finnish authorities at Abo, and Reed's possession of English, American and German passports. 
Reed, traveling under the alias of Casgormlich, carried diamonds, a large sum of money, Soviet 
propaganda literature, and film. On April 21, 1920, the American legation at Helsingfors cabled the 
State Department: 

• • • 

Am forwarding by the next pouch certified copies of letters from Emma Goldman, Trotsky, 
Lenin and Sirola found in Reed's possession. Foreign Office has promised to furnish 
complete record of the Court proceedings. 

Once again Sands intervened: "I knew Mr. Reed personally."— And, as in 1915, Metropolitan 
magazine also came to Reed's aid. H. J. Whigham wrote on April 15, 1920, to Bainbridge Colby in 
the State Department: "Have heard John Reed in danger of being executed in Finland. Hope the 
State Dept. can take immediate steps to see that he gets proper trial. Urgently request prompt 
action."— This was in addition to an April 13, 1920 telegram from Harry Hopkins, who was 
destined for fame under President Roosevelt: 

Understand State Dept. has information Jack Reed arrested Finland, will be executed. As 
one of his friends and yours and on his wife's behalf urge you take prompt action prevent 
execution and secure release. Feel sure can rely your immediate and effective intervention.— 

John Reed was subsequently released by the Finnish authorities. 

This paradoxical account on intervention in behalf of a Soviet agent can have several explanations. 
One hypothesis that fits other evidence concerning Wall Street and the Bolshevik Revolution is that 
John Reed was in effect an agent of the Morgan interests — perhaps only half aware of his double 
role — that his anticapitalist writing maintained the valuable myth that all capitalists are in 
perpetual warfare with all socialist revolutionaries. Carroll Quigley, as we have already noted, 
reported that the Morgan interests financially supported domestic revolutionary organizations and 
anticapitalist writings.— And we have presented in this chapter irrefutable documentary evidence 
that the Morgan interests were also effecting control of a Soviet agent, interceding on his behalf 
and, more important, generally intervening in behalf of Soviet interests with the U.S. government. 
These activities centered at a single address: 120 Broadway, New York City. 


'By a quirk the papers of incorporation for the Equitable Office Building were drawn up by 
Dwight W. Morrow, later a Morgan partner, but then a member of the law firm of Simpson, 
Thacher & Bartlett. The Thacher firm contributed two members to the 1917 American Red 
Cross Mission to Russia (see chapter five). 

3 Carroll Quigley, Tragedy and Hope (New York: Macmillan, 1966), p. 938. Quigley was 
writing in 1965, so this places the start of the infiltration at about 1915, a date consistent 
with the evidence here presented. 

4 Frank A. Vanderlip, From Farm Boy to Financier (New York: A. Appleton-Century, 

5 Ibid., p. 267. 

6 Ibid., pp. 268-69. It should be noted that several names mentioned by Vanderlip turn up 
elsewhere in this book: Rockefeller, Armour, Guaranty Trust, and (Otto) Kahn all had some 
connection more or less with the Bolshevik Revolution and its aftermath. 

7 Ibid., p. 269. 

8 U.S. Stale Dept. Decimal File, 861.00/961. 

• • • 

Sands memorandum to Lansing, p. 9. 

10 William Franklin Sands wrote several books, including Undiplomatic Memoirs (New 
York: McGraw-Hill, 1930), a biography covering the years to 1904. Later he wrote Our 
Jungle Diplomacy (Chapel Hill: University of North Carolina Press, 1941), an 
unremarkable treatise on imperialism in Latin America. The latter work is notable only for a 
minor point on page 102: the willingness to blame a particularly unsavory imperialistic 
adventure on Adolf Stahl, a New York banker, while pointing oust quite unnecessarily that 
Stahl was of "German- Jewish origin." In August 1918 he published an article, "Salvaging 
Russia," in Asia, to explain support of the Bolshevik regime. 

"All the above in U.S. State Dept. Decimal File, 861.00/969. 

12 The author cannot forbear comparing the treatment of academic researchers. In 1973, for 
example, the writer was still denied access to some State Department files dated 1919. 

13 U.S. State Dept. Decimal File, 861.51/333. 


U.S. State Dept. Decimal File, 861.516 84, September 2, 1919. 

15 Ibid. 

16 Other contributors to the Masses mentioned in this book were journalist Robert Minor, 
chairman of the, U.S. Public Info, marion Committee; George Creel; Carl Sandburg, poet- 
historian; and Boardman Robinson, an artist. 

17 Granville Hicks, John Reed, 1887-1920 (New York: Macmillan, 1936), p. 215. 

18 U.S. State Dept. Decimal File, 860d.l 121 R 25/4. 

19 Ibid., 360d.ll21/R25/18. According to Granville Hicks in John Reed, "Masses could not 
pay his [Reed's] expenses. Finally, friends of the magazine, notably Eugene Boissevain, 
raised the money" (p. 249). 

20 U.S. State Dept. Decimal File, 360. D. II21.R/20/221/2, /R25 (John Reed). The letter was 
transferred by Mr. Polk to the State Department archives on May 2, 1935. All italics added. 

21 Ibid.,360d. 1121 R 25/72. 

22 Ibid. 

23 This was addressed to Bainbridge Colby, ibid., 360d.l 121 R 25/30. Another letter, dated 
April 14, 1920, and addressed to the secretary of state from 100 Broadway, New York, was 
from W. Bourke Cochrane; it also pleaded for the release of John Reed. 

24 Quigley, op. cit. 

*The John MacGregor Grant Co., agent for the Russo-Asiatic Bank (involved in financing 
the Bolsheviks), was at 120 Broadway — and financed by Guaranty Trust Company. 

**Sir Ernest Cassel, prominent British financier. 

• • • 

Chapter IX 


Soviet Government desire Guarantee [sic] Trust Company to become fiscal agent in 
United States for all Soviet operations and contemplates American purchase Eestibank 
with a view to complete linking of Soviet fortunes with American financial interests. 

William H. Coombs, reporting to the U.S. embassy in London, June 1, 1920 (U.S. State 
Dept. Decimal File, 861.51/752). ("Eestibank" was an Estonian bank) 

In 1918 the Soviets faced a bewildering array of internal and external problems. They occupied a 
mere fraction of Russia. To subdue the remainder, they needed foreign arms, imported food, outside 
financial support, diplomatic recognition, and — above all — foreign trade. To gain diplomatic 
recognition and foreign trade, the Soviets first needed representation abroad, and representation in 
turn required financing through gold or foreign currencies. As we have already seen, the first step 
was to establish the Soviet Bureau in New York under Ludwig Martens. At the same time, efforts 
were made to transfer funds to the United States and Europe for purchases of needed goods. Then 
influence was exerted in the U.S. to gain recognition or to obtain the export licenses needed to ship 
goods to Russia. 

New York bankers and lawyers provided significant — in some cases, critical — assistance for each 
of these tasks. When Professor George V. Lomonossoff, the Russian technical expert in the Soviet 
Bureau, needed to transfer funds from the chief Soviet agent in Scandinavia, a prominant Wall 
Street attorney came to his assistance — using official State Department channels and the acting 
secretary of state as an intermediary. When gold had to be transferred to the United States, it was 
American International Corporation, Kuhn, Loeb & Co., and Guaranty Trust that requested the 
facilities and used their influence in Washington to smooth the way. And when it came to 
recognition, we find American firms pleading .with Congress and with the public to endorse the 
Soviet regime. 

Lest the reader should deduce — too hastily — from these assertions that Wall Street was indeed 
tinged with Red, or that Red flags were flying in the street (see frontispiece), we also in a later 
chapter present evidence that the J.P. Morgan firm financed Admiral Kolchak in Siberia. Aleksandr 
Kolchak was fighting the Bolsheviks, to install his own brand of authoritarian rule. The firm also 
contributed to the anti-Communist United Americans organization. 


The case of Professor Lomonossoff is a detailed case history of Wall Street assistance to the early 
Soviet regime. In late 1918 George V. Lomonossoff, member of the Soviet Bureau in New York 
and later first Soviet commissar of railroads, found himself stranded in the United States without 
funds. At this time Bolshevik funds were denied entry into the United States; indeed, there was no 
official recognition of the regime at all. Lomonossoff was the subject of a letter of October 24, 
1918, from the U.S. Department of Justice to the Department of State.- The letter referred to 
Lomonossoff s Bolshevik attributes and pro-Bolshevik speeches. The investigator concluded, "Prof. 
Lomonossoff is not a Bolshevik although his speeches constitute unequivocal support for the 
Bolshevik cause." Yet Lomonossoff was able to pull strings at the highest levels of the 
administration to have $25,000 transferred from the Soviet Union through a Soviet espionage agent 
in Scandinavia (who was himself later to become confidential assistant to Reeve Schley, a vice 

• • • 

president of Chase Bank). All this with the assistance of a member of a prominent Wall Street firm 
of attorneys!^ 

The evidence is presented in detail because the details themselves point up the close relationship 
between certain interests that up to now have been thought of as bitter enemies. The first indication 
of Lornonossoffs problem is a letter dated January 7, 1919, from Thomas L. Chadbourne of 
Chadbourne, Babbitt 8e Wall of 14 Wall Street (same Address as William Boyce Thompson's) to 
Frank Polk, acting secretary of state. Note the friendly salutation and casual reference to Michael 
Gruzenberg, alias Alexander Gumberg, chief Soviet agent in Scandinavia and later Lornonossoffs 

Dear Frank: You were kind enough to say that if I could inform you of the status of the 
$25,000 item of personal funds belonging to Mr. & Mrs. Lomonossoff you would set in 
motion the machinery necessary to obtain it here for them. 

I have communicated with Mr. Lomonossoff with respect to it, and he tells me that Mr. 
Michael Gruzenberg, who went to Russia for Mr. Lomonossoff prior to the difficulties 
between Ambassador Bakhmeteff and Mr. Lomonossoff, transmitted the information to him 
respecting this money through three Russians who recently arrived from Sweden, and Mr. 
Lomonossoff believes that the money is held at the Russian embassy in Stockholm, 
Milmskilnad Gaten 37. If inquiry from the State Department should develop this to be not 
the place where the money is on deposit, then the Russian embassy in Stockholm can give 
the exact address of Mr. Gruzenberg, who can give the proper information respecting it. Mr. 
Lomonossoff does not receive letters from Mr. Gruzenberg, although he is informed that 
they have been written: nor have any of his letters to Mr. Gruzenberg been delivered, he is 
also informed. For this reason it is impossible to be more definite than I have been, but I 
hope something can be done to relieve his and his wife's embarrassment for lack of funds, 
and it only needs a little help to secure this money which belongs to them to aid them on this 
side of the water. 

Thanking you in advance for anything you can do, I beg to remain, as ever, 

Yours sincerely, 
Thomas L. Chadbourne. 

In 1919, at the time this letter was written, Chadbourne was a dollar-a-year man in Washington, 
counsel and director of the U.S. War Trade Board, and a director of the U.S. Russian Bureau Inc., 
an official front company of the U.S. government. Previously, in 1915, Chadbourne organized 
Midvale Steel and Ordnance to take advantage of war business. In 1916 he became chairman of the 
Democratic Finance Committee and later a director of Wright Aeronautical and o[ Mack Trucks. 

The reason Lomonossoff was not receiving letters from Gruzenberg is that they were, in all 
probability, being intercepted by one of several governments taking a keen interest in the latter's 

On January 11, 1919, Frank Polk cabled the American legation in Stockholm: 

Department is in receipt of information that $25,000, personal funds of .... Kindly inquire of 
the Russian Legation informally and personally if such funds are held thus. Ascertain, if not, 
address of Mr. Michael Gruzenberg, reported to be in possession of information on this 
subject. Department not concerned officially, merely undertaking inquiries on behalf of a 
former Russian official in this country. 

Polk, Acting 

• • • 

Polk appears in this letter to be unaware of Lomonossoff s Bolshevik connections, and refers to him 
as "a former Russian official in this country." Be that as it may, within three days Polk received a 
reply from Morris at the U.S. Legation in Stockholm: 

January 14, 3 p.m. 3492. Your January 12, 3 p.m., No. 1443. 

Sum of $25,000 of former president of Russian commission of ways of communication in 
United States not known to Russian legation; neither can address of Mr. Michael 
Gruzenberg be obtained. 


Apparently Frank Polk then wrote to Chadbourne (the letter is not included in the source) and 
indicated that State could find neither Lomonossoff nor Michael Gruzenberg. Chadbourne replied 
on January 21, 1919: 

Dear Frank: Many thanks for your letter of January 17. I understand that there are two 
Russian legations in Sweden, one being the soviet and the other the Kerensky, and I 
presume your inquiry was directed to the soviet legation as that was the address I gave you 
in my letter, namely, Milmskilnad Gaten 37, Stockholm. 

Michael Gruzenberg's address is, Holmenkollen Sanitarium, Christiania, Norway, and I 
think the soviet legation could find out all about the funds through Gruzenberg if they will 
communicate with him. 

Thanking you for taking this trouble and assuring you of my deep appreciation, I remain, 

Sincerely yours, 
Thomas L. Chadbourne 

We should note that a Wall Street lawyer had the address of Gruzenberg, chief Bolshevik agent in 
Scandinavia, at a time when the acting secretary of state and the U.S. Stockholm legation had no 
record of the address; nor could the legation track it down. Chadbourne also presumed that the 
Soviets were the official government of Russia, although that government was not recognized by 
the United States, and Chadbourne's official government position on the War Trade Board would 
require him to know that. 

Frank Polk then cabled the American legation at Christiania, Norway, with the address of Michael 
Gruzenberg. It is not known whether Polk knew he was passing on the address of an espionage 
agent, but his message was as follows: 

To American Legation, Christiania. January 25, 1919. It is reported that Michael 
Gruzenberg is at Holmenkollen Sanitarium. Is it possible for you to locate him and inquire if 
he has any knowledge respecting disposition of $25,000 fund belonging to former president 
of Russian mission of ways of communication in the United States, Professor Lomonossoff. 

Polk, Acting 

The U.S. representative (Schmedeman) at Christiania knew Gruzenberg well. Indeed, the name had 
figured in reports from Schmedeman to Washington concerning Gruzenberg's pro-Soviet activities 
in Norway. Schmedeman replied: 

January 29, 8 p.m. 1543. Important. Your January 25, telegram No. 650. 

• • • 

Before departing to-day for Russia, Michael Gruzenberg informed our naval attache that 
when in Russia some few months ago he had received, at Lomonossoffs request, $25,000 
from the Russian Railway Experimental Institute, of which Prof. Lomonossoff was 
president. Gruzenberg claims that to-day he cabled attorney for Lomonossoff in New York, 
Morris Hillquitt [sic], that he, Gruzenberg, is in possession of the money, and before 
forwarding it is awaiting further instructions from the United States, requesting in the 
cablegram that Lomonossoff be furnished with living expenses for himself and family by 
Hillquitt pending the receipt of the money." 

As Minister Morris was traveling to Stockholm on the same train as Gruzenberg, the latter 
stated that he would advise further with Morris in reference to this subject. 


The U.S. minister traveled with Gruzenberg to Stockholm where he received the following cable 
from Polk: 

It is reported by legation at Christiania that Michael Gruzenberg, has for Prof. G. 
Lomonossoff, the . . . sum of $25,000, received from Russian Railway Experimental 
Institute. If you can do so without being involved with Bolshevik authorities, department 
will be glad for you to facilitate transfer of this money to Prof. Lomonossoff in this country. 
Kindly reply. 

Polk, Acting 

This cable produced results, for on February 5, 1919, Frank Polk wrote to Chadbourne about a 
"dangerous bolshevik agitator," Gruzenberg: 

My Dear Tom: I have a telegram from Christiania indicating that Michael Gruzenberg has 
the $25,000 of Prof. Lomonossoff, and received it from the Russian Railway Experimental 
Institute, and that he had cabled Morris Hillquitt [sic], at New York, to furnish Prof. 
Lomonossoff money for living expenses until the fund in question can be transmitted to him. 
As Gruzenberg has just been deported from Norway as a dangerous bolshevik agitator, he 
may have had difficulties in telegraphing from that country. I understand he has now gone to 
Christiania, and while it is somewhat out of the department's line of action, I shall be glad, if 
you wish, to see if I can have Mr. Gruzenberg remit the money to Prof. Lomonossoff from 
Stockholm, and am telegraphing our minister there to find out if that can be done. 

Very sincerely, yours, 
Frank L. Polk 

The telegram from Christiania referred to in Polk's letter reads as follows: 

February 3, 6 p.m., 3580. Important. Referring department's January 12, No. 1443, $10,000 
has now been deposited in Stockholm to my order to be forwarded to Prof. Lomonossoff by 
Michael Gruzenberg, one of the former representatives of the bolsheviks in Norway. I 
informed him before accepting this money that I would communicate with you and inquire if 
it is your wish that this money be forwarded to Lomonossoff. Therefore I request 
instructions as to my course of action. 


Subsequently Morris, in Stockholm, requested disposal instructions for a $10,000 draft deposited in 

a Stockholm bank. His phrase "[this] has been my only connection with the affair" suggests that 

• • • 

Morris was aware that the Soviets could, and probably would, claim this as an officially expedited 
monetary transfer, since this action implied approval by the U.S. of such monetary transfers. Up to 
this time the Soviets had been required to smuggle money into the U.S. 

Four p.m. February 12, 3610, Routine. 

With reference to my February 3, 6 p.m., No. 3580, and your February 8, 7 p.m., No. 1501. 
It is not clear to me whether it is your wish for me to transfer through you the $10,000 
referred to Prof. Lomonossoff Being advised by Gruzenberg that he had deposited this 
money to the order of Lomonossoff in a Stockholm bank and has advised the bank that this 
draft could be sent to America through me, provided I so ordered, has been my only 
connection with the affair. Kindly wire instructions. 


Then follows a series of letters on the transfer of the $10,000 from A/B Nordisk Resebureau to 
Thomas L. Chadbourne at 520 Park Avenue, New York City, through the medium of the State 
Department. The first letter contains instructions from Polk, on the mechanics of the transfer; the 
second, from Morris to Polk, contains $10,000; the third, from Morris to A/B Nordisk Resebureau, 
requesting a draft; the fourth is a reply from the bank with a check; and the fifth is the 

Your February 12, 4 p.m., No. 3610. 

Money may be transmitted direct to Thomas L. Chadbourne, 520 Park Avenue, New York 

Polk, Acting 

Dispatch, No. 1600, March 6, 1919: 

The Honorable the Secretary of State, 

Sir: Referring to my telegram, No. 3610 of February 12, and to the department's reply, No. 
1524 of February 19 in regard to the sum of $10,000 for Professor Lomonossoff, I have the 
honor herewith to inclose a copy of a letter which I addressed on February 25 to A. B. 
Nordisk Resebureau, the bankers with whom this money was deposited; a copy of the reply 
of A. B. Nordisk Resebureau, dated February 26; and a copy of my letter to the A. B. 
Nordisk Resebureau, dated February 27. 

It will be seen from this correspondence that the bank was desirous of having this money 
forwarded to Professor Lomonossoff. I explained to them, however, as will be seen from my 
letter of February 27, that I had received authorization to forward it directly to Mr. Thomas 
L. Chadbourne, 520 Park Avenue, New York City. I also inclose herewith an envelope 
addressed to Mr. Chadbourne, in which are inclosed a letter to him, together with a check on 
the National City Bank of New York for $10,000. 

I have the honor to be, 

sir, Your obedient servant, 

Ira N. Morris 

• • • 

A. B. Nordisk Reserbureau, 

No. 4 Vestra Tradgardsgatan, Stockholm. 

Gentlemen: Upon receipt of your letter of January 30, stating that you had received $10,000 
to be paid out to Prof. G. V. Lomonossoff, upon my request, I immediately telegraphed to 
my Government asking whether they wished this money forwarded to Prof. Lomonossoff. I 
am to-day in receipt of a reply authorizing me to forward the money direct to Mr. Thomas L. 
Chadbourne, payable to Prof. Lomonossoff. I shall be glad to forward it as instructed by my 

I am, gentlemen, 

Very truly, yours, 
Ira N. Morris 

Mr. I. N. Morris, 

American Minister, Stockholm 

Deal Sir: We beg to acknowledge the receipt of your favor of yesterday regarding payment 
of dollars 10,000 — to Professor G. V. Lomonossoff, and we hereby have the pleasure to 
inclose a check for said amount to the order of Professor G. V. Lomonossoff, which we 
understand that you are kindly forwarding to this gentleman. We shall be glad to have your 
receipt for same, arid beg to remain, 

Yours, respectfully, 

A. B. Nordisk Reserbureau 

E. Molin 

A. B. Nordisk Resebureau. 


Gentlemen: I beg to acknowledge receipt of your letter of February 26, inclosing a check for 
$10,000 payable to Professor G. V. Lomonossoff. As I advised you in my letter of February 
25, I have been authorized to forward this check to Mr. Thomas L. Chadbourne, 520 Park 
Avenue, New York City, and I shall forward it to this gentleman within the next few days, 
unless you indicate a wish to the contrary. 

Very truly, yours, 
Ira N. Morris 

Then follow an internal State Department memorandum and Chadbourne's acknowledgment: 

Mr. Phillips to Mr. Chadbourne, April 3, 1919. 

• • • 

Sir: Referring to previous correspondence regarding a remittance of ten thousand dollars 
from A. B. Norsdisk Resebureau to Professor G. V. Lomonossoff, which you requested to 
be transmitted through the American Legation at Stockholm, the department informs you 
that it is in receipt of a dispatch from the American minister at Stockholm dated March 6, 
1919, covering the enclosed letter addressed to you, together with a check for the amount 
referred to, drawn to the order to Professor Lomonossoff. 

I am, sir, your obedient servant 

William Phillips, 

Acting Secretary of State. 

Inclosure: Sealed letter addressed Mr. Thomas L. Chadbourne, inclosed with 1,600 from 

Reply of Mr. Chadbourne, April 5, 1919. 

Sir: I beg to acknowledge receipt of your letter of April 3, enclosing letter addressed to me, 
containing check for $10,000 drawn to the order of Professor Lomonossoff, which check I have to- 
day delivered. 

I beg to remain, with great respect, 

Very truly, yours, 

Thomas L. Chadbourne 

Subsequently the Stockholm legation enquired concerning Lomonossoffs address in the U.S. and 
was informed by the State Department that "as far as the department is aware Professor George V. 
Lomonossoff can be reached in care of Mr. Thomas L. Chadbourne, 520 Park Avenue, New York 

It is evident that the State Department, for the reason either of personal friendship between Polk and 
Chadbourne or of political influence, felt it had to go along and act as bagman for a Bolshevik 
agent — just ejected from Norway. But why would a prestigious establishment law firm be so 
intimately interested in the health and welfare of a Bolshevik emissary? Perhaps a contemporary 
State Department report gives the clue: 

Martens, the Bolshevik representative, and Professor Lomonossoff are banking on the fact 
that Bullitt and his party will make a favorable report to the Mission and the President 
regarding conditions in Soviet Russia and that on the basis of this report the Government of 
the United States will favor dealing with the Soviet Government as, proposed by Martens. 
March 29, 1919.- 


It was commercial exploitation of Russia that excited Wall Street, and Wall Street had lost no time 
in preparing its program. On May 1, 1918 — an auspicious date for Red revolutionaries — the 
American League to Aid and Cooperate with Russia was established, and its program approved in a 
conference held in the Senate Office Building, Washington, D.C. The officers and executive 
committee of the league represented some superficially dissimilar factions. Its president was Dr. 
Frank J. Goodnow, president of Johns Hopkins University. Vice presidents were the ever active 
William Boyce Thompson, Oscar S. Straus, James Duncan, and Frederick C. Howe, who wrote 
Confessions of a Monopolist, the rule book by which monopolists could control society. The 


Treasurer was George P. Whalen, vice president of Vacuum Oil Company. Congress was 
represented by Senator William Edgar Borah and Senator John Sharp Williams, of the Senate 
Foreign Relations Committee; Senator William N. Calder; and Senator Robert L. Owen, chairman 
of the Banking and Currency Committee. House members were Henry R. Cooper and Henry D. 
Flood, chairman of the House Foreign Affairs Committee. American business was represented by 
Henry Ford; Charles A. Coffin, chairman of the board of General Electric Company; and M. A. 
Oudin, then foreign manager of General Electric. George P. Whalen represented Vacuum Oil 
Company, and Daniel Willard was president of the Baltimore & Ohio Railroad. The more overtly 
revolutionary element was represented by Mrs. Raymond Robins, whose name was later found to be 
prominent in the Soviet Bureau files and in the Lusk Committee hearings; Henry L. Slobodin, 
described as a "prominent patriotic socialist"; and Lincoln Steffens, a domestic Communist of note. 

In other words, this was a hybrid executive committee; it represented domestic revolutionary 
elements, the Congress of the United States, and financial interests prominently involved with 
Russian affairs. 

Approved by the executive committee was a program that emphasized the establishment of an 
official Russian division in the U.S. government "directed by strong men." This division would 
enlist the aid of universities, scientific organizations, and other institutions to study the "Russian 
question," would coordinate and unite organizations within the United States "for the safeguarding 
of Russia," would arrange for a "special intelligence committee for the investigation of the Russian 
matter," and, generally, would itself study and investigate what was deemed to be the "Russian 
question." The executive committee then passed a resolution supporting President Woodrow 
Wilson's message to the Soviet congress in Moscow and the league affirmed its own support for the 
new Soviet Russia. 

A few weeks later, on May 20, 1918, Frank J. Goodnow and Herbert A. Carpenter, representing the 
league, called upon Assistant Secretary of State William Phillips and impressed upon him the 
necessity for establishing an "official Russian Division of the Government to coordinate all Russian 
matters. They asked me [wrote Phillips] whether they should take this matter up with the 
President. "- 

Phillips reported this directly to the secretary of state and on the next day wrote Charles R. Crane in 
New York City requesting his views on the American League to Aid and Cooperate with Russia. 
Phillips besought Crane, "I really want your advice as to how we should treat the league .... We do 
not want to stir up trouble by refusing to cooperate with them. On the other hand it is a queer 
committee and I don't quite 'get it.'"- 

In early June there arrived at the State Department a letter from William Franklin Sands of 
American International Corporation for Secretary of State Robert Lansing. Sands proposed that the 
United States appoint an administrator in Russia rather than a commission, and opined that "the 
suggestion of an allied military force in Russia at the present moment seems to me to be a very 
dangerous one."- Sands emphasized the possibility of trade with Russia and that this possibility 
could be advanced "by a well chosen administrator enjoying the full confidence of the government"; 
he indicated that "Mr. Hoover" might fit the role.- The letter was passed to Phillips by Basil Miles, 
a former associate of Sands, with the expression, "I think the Secretary would find it worthwhile to 
look through." 

In early June the War Trade Board, subordinate to the State Department, passed a resolution, and a 
committee of the board comprising Thomas L. Chadbourne (Professor Lomonossoff s contact), 
Clarence M. Woolley, and John Foster Dulles submitted a memorandum to the Department of State, 
urging consideration of ways and means "to bring about closer and more friendly commercial 
relations between the United States and Russia." The board recommended a mission to Russia and 
reopened the question whether this should result from an invitation from the Soviet government. 


Then on June 10, M. A. Oudin, foreign manager of General Electric Company, expressed his views 
on Russia and clearly favored a "constructive plan for the economic assistance" of Russia. 2 In 
August 1918 Cyrus M. McCormick of International Harvester wrote to Basil Miles at the State 
Department and praised the President's program for Russia, which McCormick thought would be "a 
golden opportunity."— 

Consequently, we find in mid-1918 a concerted effort by a segment of American business — 
obviously prepared to open up trade — to take advantage of its own preferred position regarding the 


In 1918 such assistance to the embryonic Bolshevik regime was justified on the grounds of 
defeating Germany and inhibiting German exploitation of Russia. This was the argument used by 
W. B. Thompson and Raymond Robins in sending Bolshevik revolutionaries and propaganda teams 
into Germany in 1918. The argument was also employed by Thompson in 1917 when conferring 
with Prime Minister Lloyd George about obtaining British support for the emerging Bolshevik 
regime. In June 1918 Ambassador Francis and his staff returned from Russia and urged President 
Wilson "to recognize and aid the Soviet government of Russia."— These reports made by the 
embassy staff to the State Department were leaked to the press and widely printed. Above all, it was 
claimed that delay in recognizing the Soviet Union would aid Germany "and helps the German plan 
to foster reaction and counter-revolution."— Exaggerated statistics were cited to support the 
proposal — for example, that the Soviet government represented ninety percent of the Russian 
people "and the other ten percent is the former propertied and governing class .... Naturally they are 
displeased."— A former American official was quoted as saying, "If we do nothing — that is, if we 
just let things drift — we help weaken the Russian Soviet Government. And that plays Germany's 
game."— So, it was recommended that "a commission armed with credit and good business advice 
could help much." 

Meanwhile, inside Russia the economic situation had become critical and the inevitability of an 
embrace with capitalism dawned on the Communist Party and its planners. Lenin crystallized this 
awareness before the Tenth Congress of the Russian Communist Party: 

Without the assistance of capital it will be impossible for us to retain proletarian power in an 
incredibly ruined country in which the peasantry, also ruined, constitutes the overwhelming 
majority — and, of course, for this assistance capital will squeeze hundreds per cent out of 
us. This is what we have to understand. Hence, either this type of economic relations or 
nothing ....— 

Then Leon Trotsky was quoted as saying, "What we need here is an organizer like Bernard M. 

Soviet awareness of its impending economic doom suggests that American and German business 
was attracted by the opportunity of exploiting the Russian market for needed goods; the Germans, 
in fact, made an early start in 1918. The first deals made by the Soviet Bureau in New York indicate 
that earlier American financial and moral support of the Bolsheviks was paying off in the form of 

The largest order in 1919-20 was contracted to Morris & Co., Chicago meatpackers, for fifty 
million pounds of food products, valued at approximately $10 million. The Morris meatpacking 
family was related to the Swift family. Helen Swift, later connected with the Abraham Lincoln 
Center "Unity," was married to Edward Morris (of the meatpacking firm) and was also the brother 
of Harold H. Swift, a "major" in the 1917 Thompson Red Cross Mission to Russia. 



Date of 


Goods Sold 


July 7, 1919 

Shaper Co.* 



July 30, 1919 

Kempsmith Mfg. 



May 10, 1919 

F. Mayer Boot 
& Shoe* 



August 1919 

Steel Sole 
Shoe & Co.* 



July 23, 1919 

Eline Berlow, 




July 24, 1919 

Fischmann & Co. 



September 29, 

Weinberg & 



October 27, 1919 

LeHigh Machine 

Printing presses 


January 22, 1920 

Morris & Co. 

50 million pounds 
of food products 


*Later handled through Bobroff Foreign Trade and Engineering Co., Milwaukee. 

SOURCE: U.S., Sena 
the Committee on Foi 

te, Russian Propagandc 
•eign Relations, 66th Cc 

i, hearings before a subcommittee of 
ng., 2d sess., 1920, p. 71. 

Ludwig Martens was formerly vice president of Weinberg & Posner, located at 120 Broadway, New 
York City, and this firm was given a $3 million order. 


Gold was the only practical means by which the Soviet Union could pay for its foreign purchases 
and the international bankers were quite willing to facilitate Soviet gold shipments. Russian gold 
exports, primarily imperial gold coins, started in early 1920, to Norway and Sweden. These were 
transshipped to Holland and Germany for other world destinations, including the United States. 

In August 1920, a shipment of Russian gold coins was received at the Den Norske Handelsbank in 
Norway as a guarantee for payment of 3,000 tons of coal by Niels Juul and Company in the U.S. in 
behalf of the Soviet government. These coins were transferred to the Norges Bank for safekeeping. 

• • • 

The coins were examined and weighed, were found to have been minted before the outbreak of war 
in 1914, and were therefore genuine imperial Russian coins 


Shortly after this initial episode, the Robert Dollar Company of San Francisco received gold bars, 
valued at thirty-nine million Swedish kroner, in its Stockholm account; the gold "bore the stamp of 
the old Czar Government of Russia." The Dollar Company agent in Stockholm applied to the 
American Express Company for facilities to ship the gold to the United States. American Express 
refused to handle the shipment. Robert Dollar, it should be noted, was a director of American 
International Company; thus AIC was linked to the first attempt at shipping gold direct to 

Simultaneously it was reported that three ships had left Reval on the Baltic Sea with Soviet gold 
destined for the U.S. The S.S. Gauthod loaded 216 boxes of gold under the supervision of Professor 
Lomonossoff — now returning to the United States. The S.S. Carl Line loaded 216 boxes of gold 
under the supervision of three Russian agents. The S.S. Ruheleva was laden with 108 boxes of gold. 
Each box contained three poods of gold valued at sixty thousand gold rubles each. This was 
followed by a shipment on the S.S. Wheeling Mold. 

Kuhn, Loeb & Company, apparently acting in behalf of Guaranty Trust Company, then inquired of 
the State Department concerning the official attitude towards the receipt of Soviet gold. In a report 
the department expressed concern because if acceptance was refused, then "the gold [would] 
probably come back on the hands of the War Department, causing thereby direct governmental 
responsibility and increased embarrassment."— The report, written by Merle Smith in conference 
with Kelley and Gilbert, argues that unless the possessor has definite knowledge as to imperfect 
title, it would be impossible to refuse acceptance. It was anticipated that the U.S. would be 
requested to melt the gold in the assay office, and it was thereupon decided to telegraph Kuhn, Loeb 
& Company that no restrictions would be imposed on the importation of Soviet gold into the United 

The gold arrived at the New York Assay Office and was deposited not by Kuhn, Loeb & 
Company — but by Guaranty Trust Company of New York City. Guaranty Trust then inquired of 
the Federal Reserve Board, which in turn inquired of the U.S. Treasury, concerning acceptance and 
payment. The superintendent of the New York Assay Office informed the Treasury that the 
approximately seven million dollars of gold had no identifying marks and that "the bars deposited 
have already been melted in United States mint bars." The Treasury suggested that the Federal 
Reserve Board determine whether Guaranty Trust Company had acted "for its own account, or the 
account of another in presenting the gold," and particularly "whether or not any transfer of credit or 
exchange transaction has resulted from the importation or deposit of the gold."— 

On November 10, 1920, A. Breton, a vice president of the Guaranty Trust, wrote to Assistant 
Secretary Gilbert of the Treasury Department complaining that Guaranty had not received from the 
assay office the usual immediate advance against deposits of "yellow metal left with them for 
reduction." The letter states that Guaranty Trust had received satisfactory assurances that the bars 
were the product of melting French and Belgium coins, although it had purchased the metal in 
Holland. The letter requested that the Treasury expedite payment for the gold. In reply the Treasury 
argued that it "does not purchase gold tendered to the United States mint or assay offices which is 
known or suspected to be of Soviet origin," and in view of known Soviet sales of gold in Holland, 
the gold submitted by Guaranty Trust Company was held to be a "doubtful case, with suggestions of 
Soviet origin." It suggested that the Guaranty Trust Company could withdraw the gold from the 
assay office at any time it wished or could "present such further evidence to the Treasury, the 
Federal Reserve Bank of New York or the Department of State as may be necessary to clear the 
gold of any suspicion of Soviet origin."— 

• • • 

There is no file record concerning final disposition of this case but presumably the Guaranty Trust 
Company was paid for the shipment. Obviously this gold deposit was to implement the mid- 1920 
fiscal agreement between Guaranty Trust and the Soviet government under which the company 
became the Soviet agent in the United States (see epigraph to this chapter). 

It was determined at a later date that Soviet gold was also being sent to the Swedish mint. The 
Swedish mint "melts Russian gold, assays it and affixes the Swedish mint stamp at the request of 
Swedish banks or other Swedish subjects owing the gold."— And at the same time Olof Aschberg, 
head of Svenska Ekonomie A/B (the Soviet intermediary and affiliate of Guaranty Trust), was 
offering "unlimited quantities of Russian gold" through Swedish banks.— 

In brief, we can tie American International Corporation, the influential Professor Lomonossoff, 
Guaranty Trust, and Olof Aschberg (whom we've previously identified) to the first attempts to 
import Soviet gold into the United States. 


Guaranty Trust's interest in Soviet Russia was renewed in 1920 in the form of a letter from Henry 
C. Emery, assistant manager of the Foreign Department of Guaranty Trust, to De Witt C. Poole in 
the State Department. The letter was dated January 21, 1920, just a few weeks before Allen Walker, 
the manager of the Foreign Department, became active in forming the virulent anti-Soviet 
organization United Americans (see page 165). Emery posed numerous questions about the legal 
basis of the Soviet government and banking in Russia and inquired whether the Soviet government 
was the de facto government in Russia.— "Revolt before 1922 planned by Reds," claimed United 
Americans in 1920, but Guaranty Trust had started negotiations with these same Reds and was 
acting as the Soviet agent in the U.S. in mid- 1920. 

In January 1922 Secretary of Commerce Herbert Hoover, interceded with the State Department in 
behalf of a Guaranty Trust scheme to set up exchange relations with the "New State Bank at 
Moscow." This scheme, wrote Herbert Hoover, "would not be objectionable if a stipulation were 
made that all monies coming into their possession should be used for the purchase of civilian 
commodities in the United States"; and after asserting that such relations appeared to be in line with 
general policy, Hoover added, "It might be advantageous to have these transactions organized in 
such a manner that we know what the movement is instead of disintegrated operations now 
current."— Of course, such "disintegrated operations" are consistent with the operations of a free 
market, but this approach Herbert Hoover rejected in favor of channeling the exchange through 
specified and controllable sources in New York. Secretary of State Charles E. Hughes expressed 
dislike of the Hoover-Guaranty Trust scheme, which he thought could be regarded as de facto 
recognition of the Soviets while the foreign credits acquired might be used to the disadvantage of 
the United States.— A noncommittal reply was sent by State to Guaranty Trust. However, Guaranty 
went ahead (with Herbert Hoover's support),— participated in formation of the first Soviet 
international bank, and Max May of Guaranty Trust became head of the foreign department of the 
new Ruskombank.— 


'U.S. State Dept. Decimal File, 861.00/3094. 

2 This section is from U.S., Senate, Russian Propaganda, hearings before a subcommittee of 
the Committee on Foreign Relations, 66th Cong., 2d sess., 1920. 

• • • 

3 Morris Hillquit was the intermediary between New York banker Eugene Boissevain and 
John Reed in Petrograd. 

4 U.S. State Dept. Decimal File, 861. 0074214a. 

5 Ibid., 


6 Ibid. 

7 Ibid., 


8 Ibid. 

9 Ibid., 861.00/2002. 


'ibid.M 316-18-1306. 

2 Ibid. 

3 Ibid. 

4 Ibid. 

5 V. 1 . Lenin, Report to the Tenth Congress of the Russian Communist Party, (Bolshevik), 
March 15, 1921. 

6 William Reswick, I Dreamt Revolution (Chicago: Henry Regnery, 1952), p. 78. 

7 U.S. State Dept. Decimal File, 861.51/815. 

8 Ibid., 861.51/836. 

9 Ibid., 861.51/837, October 4, 1920. 

20 Ibid., 861.51/837, October 24, 1920. 

21 Ibid., 861.51/853, November 11, 1920. 

22 Ibid., 316-119, 1132. 

23 Ibid., 316-119-785. This report has more data on transfers of Russian gold through other 
countries and intermediaries. See also 316-119-846. 

24 Ibid., 861.516/86. 

• • • 


Chapter X 


I would not sit down to lunch with a Morgan — except possibly to learn something of 
his motives and attitudes. 

William E. Dodd, Ambassador Dodd's Diary, 1933-1938 

So far our story has revolved around a single major financial house — Guaranty Trust Company, 
the largest trust company in the United States and controlled by the J.P. Morgan firm. Guaranty 
Trust used Olof Aschberg, the Bolshevik banker, as its intermediary in Russia before and after the 
revolution. Guaranty was a backer of Ludwig Martens and his Soviet Bureau, the first Soviet 
representatives in the United States. And in mid- 1920 Guaranty was the Soviet fiscal agent in the 
U.S.; the first shipments of Soviet gold to the United States also traced back to Guaranty Trust. 

There is a startling reverse side to this pro-Bolshevik activity — Guaranty Trust was a founder of 
United Americans, a virulent anti-Soviet organization which noisily threatened Red invasion by 
1922, claimed that $20 million of Soviet funds were on the way to fund Red revolution, and 
forecast panic in the streets and mass starvation in New York City. This duplicity raises, of course, 
serious questions about the intentions of Guaranty Trust and its directors. Dealing with the Soviets, 
even backing them, can be explained by apolitical greed or simply profit motive. On the other hand, 
spreading propaganda designed to create fear and panic while at the same time encouraging the 
conditions that give rise to the fear and panic is a considerably more serious problem. It suggests 
utter moral depravity. Let's first look more closely at the anti-Communist United Americans. 


In 1920 the organization United Americans was founded. It was limited to citizens of the United 
States and planned for five million members, "whose sole purpose would be to combat the 
teachings of the socialists, communists, I.W.W., Russian organizations and radical farmers 

In other words, United Americans was to fight all those institutions and groups believed to be 

The officer's of the preliminary organization established to build up United Americans were Allen 
Walker of the Guaranty Trust Company; Daniel Willard, president of the Baltimore 8c Ohio 
Railroad; H. H. Westinghouse, of Westinghouse Air Brake Company; and Otto H. Kahn, of Kuhn, 
Loeb 8c Company and American International Corporation. These Wall Streeters were backed up 
by assorted university presidents arid Newton W. Gilbert (former governor of the Philippines). 
Obviously, United Americans was, at first glance, exactly the kind of organization that 
establishment capitalists would be expected to finance and join. Its formation should have brought 
no great surprise. 

On the other hand, as we have already seen, these financiers were also deeply involved in 
supporting the new Soviet regime in Russia — although this support was behind the scenes, 
recorded only in government files, and not to be made public for 50 years. As part of United 
Americans, Walker, Willard, Westinghouse, and Kahn were playing a double game. Otto H. Kahn, 
a founder of the anti-Communist organization, was reported by the British socialist J. H. Thomas as 


having his "face towards the light." Kahn wrote the preface to Thomas's book. In 1924 Otto Kahn 
addressed the League for Industrial Democracy and professed common objectives with this activist 
socialist group (see page 49). The Baltimore & Ohio Railroad (Willard's employer) was active in 
the development of Russia during the 1920s. Westinghouse in 1920, the year United Americans was 
founded, was operating a plant in Russia that had been exempted from nationalization. And the role 
of Guaranty Trust has already been minutely described. 


In March 1920 the New York Times headlined an extensive, detailed scare story about Red invasion 
of the United States within two years, an invasion which was to be financed by $20 million of 
Soviet funds "obtained by the murder and robbery of the Russian nobility. "- 

United Americans had, it was revealed, made a survey of "radical activities" in the United States, 
and had done so in its role as an organization formed to "preserve the Constitution of the United 
States with the representative form of government and the right of individual possession which the 
Constitution provides." 

Further, the survey, it was proclaimed, had the backing of the executive board, "including Otto H. 
Kahn, Allen Walker of the Guaranty Trust Company, Daniel Willard," and others. The survey 
asserted that 

the radical leaders are confident of effecting a revolution within two years, that the start is to 
be made in New York City with a general strike, that Red leaders have predicted much 
bloodshed and that the Russian Soviet Government has contributed $20,000,000 to the 
American radical movement. 

The Soviet gold shipments to Guaranty Trust in mid- 1920 (540 boxes of three poods each) were 
worth roughly $15,000,000 (at $20 a troy ounce), and other gold shipments through Robert Dollar 
and Olof Aschberg brought the total very close to $20 million. The information about Soviet gold 
for the radical movement was called "thoroughly reliable" and was "being turned over to the 
Government." The Reds, it was asserted, planned to starve New York into submission within four 

Meanwhile the Reds count on a financial panic within the next few weeks to help their cause 
along. A panic would cause distress among the workingmen and thus render them more 
susceptible to revolution doctrine. 

The United Americans' report grossly overstated the number of radicals in the United States, at first 
tossing around figures like two or five million and then settling for precisely 3,465,000 members in 
four radical organizations. The report concluded by emphasizing the possibility of bloodshed and 
quoted "Skaczewski, President of the International Publishing Association, otherwise the 
Communist Party, [who] boasted that.the time was coming soon when the Communists would 
destroy utterly the present form of society." 

In brief, United Americans published a report without substantiating evidence, designed to scare the 
man in the street into panic: The significant point of course is that this is the same group that was 
responsible for protecting and subsidizing, indeed assisting, the Soviets so they could undertake 
these same plans. 



Is this a case of the right hand not knowing what the left hand was doing? Probably not. We are 
talking about heads of companies, eminently successful companies at that. So United Americans 
was probably a ruse to divert public — and official — attention from the subterranean efforts being 
made to gain entry to the Russian market. 

United Americans is the only documented example known to this writer of an organization assisting 
the Soviet regime and also in the forefront of opposition to the Soviets. This is by no means an 
inconsistent course of action, and further research should at least focus on the following aspects: 

(a) Are there other examples of double-dealing by influential groups generally known as the 

(b) Can these examples be extended into other areas? For example, is there evidence that 
labor troubles have been instigated by these groups? 

(c) What is the ultimate purpose of these pincer tactics? Can they be related to the Marxian 
axiom: thesis versus antithesis yields synthesis? It is a puzzle why the Marxist movement 
would attack capitalism head-on if its objective was a Communist world and if it truly 
accepted the dialectic. If the objective is a Communist world — that is, if communism is the 
desired synthesis — and capitalism is the thesis, then something apart from capitalism or 
communism has to be antithesis. Could therefore capitalism be the thesis and communism 
the antithesis, with the objective of the revolutionary groups and their backers being a 
synthesizing of these two systems into some world system yet undescribed? 


Concurrently with these efforts to aid the Soviet Bureau and United Americans, the J.P. Morgan 
firm, which controlled Guaranty Trust, was providing financial assistance for one of the Bolshevik's 
primary opponents, Admiral Aleksandr Kolchak in Siberia. On June 23, 1919, Congressman Mason 
introduced House Resolution 132 instructing the State Department "to make inquiry as to all and 
singular as to the truth of . . . press reports" charging that Russian bondholders had used their 
influence to bring about the "retention of American troops in Russia" in order to ensure continued 
payment of interest on Russian bonds. According to a file memorandum by Basil Miles, an 
associate of William F. Sands, Congressman Mason charged that certain banks were attempting to 
secure recognition of Admiral Kolchak in Siberia to get payment on former Russian bonds. 

Then in August 1919 the secretary of state, Robert Lansing, received from the Rockefeller- 
influenced National City Bank of New York a letter requesting official comment on a proposed loan 
of $5 million to Admiral Kolchak; and from J.P. Morgan & Co. and other bankers another letter 
requesting the views of the department concerning an additional proposed £10 million sterling loan 
to Kolchak by a consortium of British and American bankers.- 

Secretary Lansing informed the bankers that the U.S. had not recognized Kolchak and, although 
prepared to render him assistance, "the Department did not feel it could assume the responsibility of 
encouraging such negotiations but that, nevertheless, there seemed to be no objection to the loan 
provided the bankers deemed it advisable to make it."- 

Subsequently, on September 30, Lansing informed the American consul general at Omsk that the 
"loan has since gone through in regular course"- Two fifths was taken up by British banks and three 
fifths by American banks. Two thirds of the total was to be spent in Britain and the United States 
and the remaining one third wherever the Kolchak Government wished. The loan was secured by 


Russian gold (Kolchak's) that was shipped to San Francisco. The timing of the previously described 
Soviet exports of gold suggests that cooperation with the Soviets on gold sales was determined on 
the heels of the Kolchak gold-loan agreement. 

The Soviet gold sales and the Kolchak loan also suggest that Carroll Quigley's statement that 
Morgan interests infiltrated the domestic left applied also to overseas revolutionary and 
counterrevolutionary movements. Summer 1919 was a time of Soviet military reverses in the 
Crimea and the Ukraine and this black picture may have induced British and American bankers to 
mend their fences with the anti-Bolshevik forces. The obvious rationale would be to have a foot in 
all camps, and so be in a favorable position to negotiate for concessions and business after the 
revolution or counterrevolution had succeeded and a new government stabilized. As the outcome of 
any conflict cannot be seen at the start, the idea is to place sizable bets on all the horses in the 
revolutionary race. Thus assistance was given on the one hand to the Soviets and on the other to 
Kolchak — while the British government was supporting Denikin in the Ukraine and the French 
government went to the aid of the Poles. 

In autumn 1919 the Berlin newspaper Berliner Zeitung am Mittak (October 8 and 9) accused the 
Morgan firm of financing the West Russian government and the Russian-German forces in the 
Baltic fighting the Bolsheviks — both allied to Kolchak. The Morgan firm strenuously denied the 
charge: "This firm has had no discussion, or meeting, with the West Russian Government or with 
anyone pretending to represent it, at any time."- But if the financing charge was inaccurate there is 
evidence of collaboration. Documents found by Latvian government intelligence among the papers 
of Colonel Bermondt, commander of the Western Volunteer Army, confirm "the relations claimed 
existing between Kolchak's London Agent and the German industrial ring which was back of 
Bermondt. "- 

In other words, we know that J.P. Morgan, London, and New. York bankers financed Kolchak. 
There is also evidence that connects Kolchak and his army with other anti-Bolshevik armies. And 
there seems to be little question that German industrial and banking circles were financing the all- 
Russian anti-Bolshevik army in the Baltic. Obviously bankers' funds have no national flag. 


'New York Times, June 21,1919. 

2 Ibid., March 28, 1920. 

3 U.S. State Dept. Decimal File, 861.51/649. 

4 Ibid., 861.51/675 

5 Ibid., 861.51/656 

6 Ibid., 861.51/767 — a letter from J. P. Morgan to Department of State, November 11, 1919. 
The financing itself was a hoax (see AP report in State Department files following the 
Morgan letter). 

7 Ibid., 861.51/6172 and /6361. 

• • • 

Chapter XI 


The name Rockefeller does not connote a revolutionary, and my life situation has 
fostered a careful and cautious attitude that verges on conservatism. I am not given to 
errant causes... 

John D. Rockefeller III, The Second American Revolution (New York: Harper & Row. 


Evidence already published by George Katkov, Stefan Possony, and Michael Futrell has established 
that the return to Russia of Lenin and his party of exiled Bolsheviks, followed a few weeks later by 
a party of Mensheviks, was financed and organized by the German government.- The necessary 
funds were transferred in part through the Nya Banken in Stockholm, owned by Olof Aschberg, and 
the dual German objectives were: (a) removal of Russia from the war, and (b) control of the postwar 
Russian market.- 

We have now gone beyond this evidence to establish a continuing working relationship between 
Bolshevik banker Olof Aschberg and the Morgan-controlled Guaranty Trust Company in New York 
before, during, and after the Russian Revolution. In tsarist times Aschberg was the Morgan agent in 
Russia and negotiator for Russian loans in the United States; during 1917 Aschberg was financial 
intermediary for the revolutionaries; and after the revolution Aschberg became head of 
Ruskombank, the first Soviet international bank, while Max May, a vice president of the Morgan- 
controlled Guaranty Trust, became director and chief of the Ruskom-bank foreign department. We 
have presented documentary evidence of a continuing working relationship between the Guaranty 
Trust Company and the Bolsheviks. The directors of Guaranty Trust in 1917 are listed in Appendix 

Moreover, there is evidence of transfers of funds from Wall Street bankers to international 
revolutionary activities. For example, there is the statement (substantiated by a cablegram) by 
William Boyce Thompson — a director of the Federal Reserve Bank of New York, a large 
stockholder in the Rockefeller-controlled Chase Bank, and a financial associate of the Guggenheims 
and the Morgans — that he (Thompson) contributed $ 1 million to the Bolshevik Revolution for 
propaganda purposes. Another example is John Reed, the American member of the Third 
International executive committee who was financed and supported by Eugene Boissevain, a private 
New York banker, and who was employed by Harry Payne Whitney's Metropolitan magazine. 
Whitney was at that time a director of Guaranty Trust. We also established that Ludwig Martens, 
the first Soviet "ambassador" to the United States, was (according to British Intelligence chief Sir 
Basil Thompson) backed by funds from Guaranty Trust Company. In tracing Trotsky's funding in 
the U.S. we arrived at German sources, yet to be identified, in New York. And though we do not 
know the precise German sources of Trotsky's funds, we do know that Von Pavenstedt, the chief 
German espionage paymaster in the U.S., was also senior partner of Amsinck & Co. Amsinck was 
owned by the ever-present American International Corporation — also controlled by the J.P. 
Morgan firm. 

Further, Wall Street firms including Guaranty Trust were involved with Carranza's and Villa's 
wartime revolutionary activities in Mexico. We also identified documentary evidence concerning, a 
Wall Street syndicate's financing of the 1912 Sun Yat-sen revolution in China, a revolution that is 
today hailed by the Chinese Communists as the precursor of Mao's revolution in China. Charles B. 


Hill, New York attorney negotiating with Sun Yat-sen in behalf of this syndicate, was a director of 
three Westinghouse subsidiaries, and we have found that Charles R. Crane of Westinghouse in 
Russia was involved in the Russian Revolution. 

Quite apart from finance, we identified other, and possibly more significant, evidence of Wall Street 
involvement in the Bolshevik cause. The American Red Cross Mission to Russia was a private 
venture of William B. Thompson, who publicly proffered partisan support to the Bolsheviks. British 
War Cabinet papers now available record that British policy was diverted towards the Lenin- 
Trotsky regime by the personal intervention of Thompson with Lloyd George in December 1917. 
We have reproduced statements by director Thompson and deputy chairman William Lawrence 
Saunders, both of the Federal Reserve Bank of New York, strongly favoring the Bolshevists. John 
Reed not only was financed from Wall Street, but had consistent support for his activities, even to 
the extent of intervention with the State Department from William Franklin Sands, executive 
secretary of American International Corporation. In the sedition case of Robert Minor there are 
strong indications and some circumstantial evidence that Colonel Edward House intervened to have 
Minor released. The significance of the Minor case is that William B. Thompson's program for 
Bolshevik revolution in Germany was the very program Minor was implementing when arrested in 

Some international agents, for example Alexander Gumberg, worked for Wall Street and the 
Bolsheviks. In 1917 Gumberg was the representative of a U.S. firm in Petrograd, worked for 
Thompson's American Red Cross Mission, became chief Bolshevik agent in Scandinavia until he 
was deported from Norway, then became confidential assistant to Reeve Schley of Chase Bank in 
New York and later to Floyd Odium of Atlas Corporation. 

This activity in behalf of the Bolsheviks originated in large part from a single address: 120 
Broadway, New York City. The evidence for this observation is outlined but no conclusive reason 
is given for the unusual concentration of activity at a single address, except to state that it appears to 
be the foreign counterpart of Carroll Quigley's claim that J.P. Morgan infiltrated the domestic left. 
Morgan also infiltrated the international left. 

The Federal Reserve Bank of New York was at 120 Broadway. The vehicle for this pro-Bolshevik 
activity was American International Corporation — at 120 Broadway. AIC views on the Bolshevik 
regime were requested by Secretary of State Robert Lansing only a few weeks after the revolution 
began, and Sands, executive secretary of AIC, could barely restrain his enthusiasm for the 
Bolshevik cause. Ludwig Martens, the Soviet's first ambassador, had been vice president of 
Weinberg & Posner, which was also located at 120-Broadway. Guaranty Trust Company was next 
door at 140 Broadway but Guaranty Securities Co. was at 120 Broadway. In 1917 Hunt, Hill & 
Betts was at 120 Broadway, and Charles B. Hill of this firm was the negotiator in the Sun Yat-sen 
dealings. John MacGregor Grant Co., which was financed by Olof Aschberg in Sweden and 
Guaranty Trust in the United States, and which was on the Military Intelligence black list, was at 
120 Broadway. The Guggenheims and the executive heart of General Electric (also interested in 
American International) were at 120 Broadway. We find it therefore hardly surprising that the 
Bankers Club was also at 120 Broadway, on the top floor (the thirty-fourth). 

It is significant that support for the Bolsheviks did not cease with consolidation of the revolution; 
therefore, this support cannot be wholly explained in terms of the war with Germany. The 
American-Russian syndicate formed in 1918 to obtain concessions in Russia was backed by the 
White, Guggenheim, and Sinclair interests. Directors of companies controlled by these three 
financiers included Thomas W. Lamont (Guaranty Trust), William Boyce Thompson (Federal 
Reserve Bank), and John Reed's employer Harry Payne Whitney (Guaranty Trust). This strongly 
suggests that the syndicate was formed to cash in on earlier support for the Bolshevik cause in the 
revolutionary period. And then we found that Guaranty Trust financially backed the Soviet Bureau 

in New York in 1 9 1 9. 

• • • 

The first really concrete signal that previous political and financial support was paying off came in 
1923 when the Soviets formed their first international bank, Ruskombank. Morgan associate Olof 
Aschberg became nominal head of this Soviet bank; Max May, a vice president of Guaranty Trust, 
became a director of Ruskom-bank, and the Ruskombank promptly appointed Guaranty Trust 
Company its U.S. agent. 


What motive explains this coalition of capitalists and Bolsheviks? 

Russia was then — and is today — the largest untapped market in the world. Moreover, Russia, 
then and now, constituted the greatest potential competitive threat to American industrial and 
financial supremacy. (A glance at a world map is sufficient to spotlight the geographical difference 
between the vast land mass of Russia and the smaller United States.) Wall Street must have cold 
shivers when it visualizes Russia as a second super American industrial giant. 

But why allow Russia to become a competitor and a challenge to U.S. supremacy? In the late 
nineteenth century, Morgan/Rockefeller, and Guggenheim had demonstrated their monopolistic 
proclivities. In Railroads and Regulation 1877-1916 Gabriel Kolko has demonstrated how the 
railroad owners, not the farmers, wanted state control of railroads in order to preserve their 
monopoly and abolish competition. So the simplest explanation of our evidence is that a syndicate 
of Wall Street financiers enlarged their monopoly ambitions and broadened horizons on a global 
scale. The gigantic Russian market was to be converted into a captive market and a technical 
colony to be exploited by a few high-powered American financiers and the corporations under their 
control. What the Interstate Commerce Commission and the Federal Trade Commission under the 
thumb of American industry could achieve for that industry at home, a planned socialist 
government could achieve for it abroad — given suitable support and inducements from Wall Street 
and Washington, D.C. 

Finally, lest this explanation seem too radical, remember that it was Trotsky who appointed tsarist 
generals to consolidate the Red Army; that it was Trotsky who appealed for American officers to 
control revolutionary Russia and intervene in behalf of the Soviets; that it was Trotsky who 
squashed first the libertarian element in the Russian Revolution and then the workers and peasants; 
and that recorded history totally ignores the 700,000-man Green Army composed of ex-Bolsheviks, 
angered at betrayal of the revolution, who fought the Whites and the Reds. In other words, we are 
suggesting that the Bolshevik Revolution was an alliance of statists: statist revolutionaries and 
statist financiers aligned against the genuine revolutionary libertarian elements in Russia.- 

'The question now in the readers' minds must be, were these bankers also secret Bolsheviks? No, of 
course not. The financiers were without ideology. It would be a gross misinterpretation to assume 
that assistance for the Bolshevists was ideologically motivated, in any narrow sense. The financiers 
were power-motivated and therefore assisted any political vehicle that would give them an entree to 
power: Trotsky, Lenin, the tsar, Kolchak, Denikin — all received aid, more or less. All, that is, but 
those who wanted a truly free individualist society. 

Neither was aid restricted to statist Bolsheviks and statist counter-Bolsheviks. John P. Diggins, in 
Mussolini and Fascism: The View from America,- has noted in regard to Thomas Lamont of 
Guaranty Trust that 

Of all American business leaders, the one who most vigorously patronized the cause of Fascism was 
Thomas W. Lamont. Head of the powerful J.P. Morgan banking network, Lamont served as 
something of a business consultant for the government of Fascist Italy. 

• • • 

Lamont secured a $100 million loan for Mussolini in 1926 at a particularly crucial time for the 
Italian dictator. We might remember too that the director of Guaranty Trust was the father of 
Corliss Lamont, a domestic Communist. This evenhanded approach to the twin totalitarian systems, 
communism and fascism, was not confined to the Lamont family. For example, Otto Kahn, director 
of American International Corporation and of Kuhn, Leob & Co., felt sure that "American capital 
invested in Italy will find safety, encouragement, opportunity and reward."- This is the same Otto 
Kahn who lectured the socialist League of Industrial Democracy in 1924 that its objectives were his 
objectives.- They differed only — according to Otto Kahn — over the means of achieving these 

Ivy Lee, Rockefeller's public relations man, made similar pronouncements, and was responsible for 
selling the Soviet regime to the gullible American public in the late 1920s. We also have observed 
that Basil Miles, in charge of the Russian desk at the State Department and a former associate of 
William Franklin Sands, was decidedly helpful to the businessmen promoting Bolshevik causes; but 
in 1923 the same Miles authored a pro fascist article, "Italy's Black Shirts and Business."- "Success 
of the Fascists is an expression of Italy's youth," wrote Miles while glorifying the fascist movement 
and applauding its esteem for American business. 


The Marburg Plan, financed by Andrew Carnegie's ample heritage, was produced in the early years 
of the twentieth century. It suggests premeditation for this kind of superficial schizophrenia, which 
in fact masks an integrated program of power acquisition: "What then if Carnegie and his unlimited 
wealth, the international financiers and the Socialists could be organized in a movement to compel 
the formation of a league to enforce peace. "- 

The governments of the world, according to the Marburg Plan, were to be socialized while the 
ultimate power would remain in the hands of the international financiers "to control its councils and 
enforce peace [and so] provide a specific for all the political ills of mankind. "- 

This idea was knit with other elements with similar objectives. Lord Milner in England provides the 
transatlantic example of banking interests recognizing the virtues and possibilities of Marxism. 
Milner was a banker, influential in British wartime policy, and pro-Marxist.— In New York the 
socialist "X" club was founded in 1903. It counted among its members not only the Communist 
Lincoln Steffens, the socialist William English Walling, and the Communist banker Morris Hillquit, 
but also John Dewey, James T. Shotwell, Charles Edward Russell, and Rufus Weeks (vice president 
of New York Life Insurance Company). The annual meeting of the Economic Club in the Astor 
Hotel, New York, witnessed socialist speakers. In 1908, when A. Barton Hepburn, president of 
Chase National Bank, was president of the Economic Club, the main speaker was the 
aforementioned Morris Hillquit, who "had abundant opportunity to preach socialism to a gathering 
which represented wealth and financial interests."— 

From these unlikely seeds grew the modern internationalist movement, which included not only the 
financiers Carnegie, Paul Warburg, Otto Kahn, Bernard Baruch, and Herbert Hoover, but also the 
Carnegie Foundation and its progeny International Conciliation. The trustees of Carnegie were, as 
we have seen, prominent on the board of American International Corporation. In 1910 Carnegie 
donated $10 million to found the Carnegie Endowment for International Peace, and among those on 
the board of trustees were Elihu Root (Root Mission to Russia, 1917), Cleveland H. Dodge (a 
financial backer of President Wilson), George W. Perkins (Morgan partner), G. J. Balch (AIC and 
Amsinck), R. F. Herrick (AIC), H. W. Pritchett (AIC), and other Wall Street luminaries. Woodrow 
Wilson came under the powerful influence of — and indeed was financially indebted to — this 
group of internationalists. As Jennings C. Wise has written, "Historians must never forget that 

• • • 

Woodrow Wilson... made it possible for Leon Trotsky to enter Russia with an American 


But Leon Trotsky also declared himself an internationalist. We have remarked with some interest 
his high-level internationalist connections, or at least friends, in Canada. Trotsky then was not pro- 
Russian, or pro-Allied, or pro-German, as many have tried to make him out to be. Trotsky was for 
world revolution, for world dictatorship; he was, in one word, an internationalist.— Bolshevists and 
bankers have then this significant common ground — internationalism. Revolution and international 
finance are not at all inconsistent if the result of revolution is to establish more centralized 
authority. International finance prefers to deal with central governments. The last thing the banking 
community wants is laissez-faire economy and decentralized power because these would disperse 

This, therefore, is an explanation that fits the evidence. This handful of bankers and promoters was 
not Bolshevik, or Communist, or socialist, or Democrat, or even American. Above all else these 
men wanted markets, preferably captive international markets — and a monopoly of the captive 
world market as the ultimate goal. They wanted markets that could be exploited monopolistically 
without fear of competition from Russians, Germans, or anyone else — including American 
businessmen outside the charmed circle. This closed group was apolitical and amoral. In 1917, it 
had a single-minded objective — a captive market in Russia, all presented under, and intellectually 
protected by, the shelter of a league to enforce the peace. 

Wall Street did indeed achieve its goal. American firms controlled by this syndicate were later to go 
on and build the Soviet Union, and today are well on their way to bringing the Soviet military- 
industrial complex into the age of the computer. 

Today the objective is still alive and well. John D. Rockefeller expounds it in his book The Second 
American Revolution — which sports a five-pointed star on the title page.— The book contains a 
naked plea for humanism, that is, a plea that our first priority is to work for others. In other words, a 
plea for collectivism. Humanism is collectivism. It is notable that the Rockefellers, who have 
promoted this humanistic idea for a century, have not turned their OWN property over to others.. 
Presumably it is implicit in their recommendation that we all work for the Rockefellers. 
Rockefeller's book promotes collectivism under the guises of "cautious conservatism" and "the 
public good." It is in effect a plea for the continuation of the earlier Morgan-Rockefeller support of 
collectivist enterprises and mass subversion of individual rights. 

In brief, the public good has been, and is today, used as a device and an excuse for self- 
aggrandizement by an elitist circle that pleads for world peace and human decency. But so long as 
the reader looks at world history in terms of an inexorable Marxian conflict between capitalism and 
communism, the objectives of such an alliance between international finance and international 
revolution remain elusive. So will the ludicrousness of promotion of the public good by plunderers. 
If these alliances still elude the reader, then he should ponder the obvious fact that these same 
international interests and promoters are always willing to determine what other people should do, 
but are signally unwilling to be first in line to give up their own wealth and power. Their mouths are 
open, their pockets are closed. 

This technique, used by the monopolists to gouge society, was set forth in the early twentieth 
century by Frederick C. Howe in The Confessions of a Monopolist.— First, says Howe, politics is a 
necessary part of business. To control industries it is necessary to control Congress and the 
regulators and thus make society go to work for you, the monopolist. So, according to Howe, the 
two principles of a successful monopolist are, "First, let Society work for you; and second, make a 
business of politics."— These, wrote Howe, are the basic "rules of big business." 

• • • 

Is there any evidence that this magnificently sweeping objective was also known to Congress and 
the academic world? Certainly the possibility was known and known publicly. For example, witness 
the testimony of Albert Rhys Williams, an astute commentator on the revolution, before the Senate 
Overman Committee: 

... it is probably true that under the soviet government industrial life will perhaps be much slower 
in development than under the usual capitalistic system. But why should a great industrial country 
like America desire the creation and consequent competition of another great industrial rival? Are 
not the interests of America in this regard in line with the slow tempo of development which soviet 
Russia projects for herself? 

Senator Wolcott: Then your argument is that it would be to the interest of America to have Russia 

MR. WILLIAMS: Not repressed .... 

SENATOR WOLCOTT: You say. Why should America desire Russia to become an industrial 
competitor with her? 

MR. WILLIAMS: This is speaking from a capitalistic standpoint. The whole interest of America is 
not, I think, to have another great industrial rival, like Germany, England, France, and Italy, thrown 
on the market in competition. I think another government over there besides the Soviet government 
would perhaps increase the tempo or rate of development of Russia, and we would have another 
rival. Of course, this is arguing from a capitalistic standpoint. 

SENATOR WOLCOTT: So you are presenting an argument here which you think might appeal to 
the American people, your point being this, that if we recognize the Soviet government of Russia as 
it is constituted we will be recognizing a government that can not compete with us in industry for a 
great many years? 

MR. WILLIAMS: That is a fact. 

SENATOR WOLCOTT: That is an argument that under the Soviet government Russia is in no 
position, for a great many years at least, to approach America industrially? 

MR. WILLIAMS: Absolutely. - 

And in that forthright statement by Albert Rhys Williams is the basic clue to the revisionist 
interpretation of Russian history over the past half century. 

Wall Street, or rather the Morgan-Rockefeller complex represented at 120 Broadway and 14 Wall 
Street, had something very close to Williams' argument in mind. Wall Street went to bat in 
Washington for the Bolsheviks. It succeeded. The Soviet totalitarian regime survived. In the 1930s 
foreign firms, mostly of the Morgan-Rockefeller group, built the five-year plans. They have 
continued to build Russia, economically and militarily.— On the other hand, Wall Street presumably 
did not foresee the Korean War and the Vietnam War — in which 100,000 Americans and countless 
allies lost their lives to Soviet armaments built with this same imported U.S. technology. What 
seemed a farsighted, and undoubtedly profitable, policy for a Wall Street syndicate, became a 
nightmare for millions outside the elitist power circle and the ruling class. 

• • • 


'Michael Futrell, Northern Underground (London: Faber and Faber, 1963); Stefan Possony, 
Lenin: The Compulsive Revolutionary (London: George Allen & Unwin, 1966); and George 
Katkov, "German Foreign Office Documents on Financial Support to the Bolsheviks in 
1917," International Affairs 32 (Royal Institute of International Affairs, 1956). 

2 Ibid., especially Katkov. 

3 See also Voline (V.M. Eichenbaum), Nineteen-Seventeen: The Russian Revolution 
Betrayed (New York: Libertarian Book Club, n.d.). 

4 Princeton, N.J.: Princeton University Prss, 1972. 

5Ibid., p. 149. 

6 Seep. 49. 

7 Nation's Business, February 1923, pp. 22-23. 

8 Jennings C. Wise, Woodrow Wilson: Disciple of Revolution (New York: Paisley Press, 
1938), p.45 

9 Ibid., p.46 

10 Seep. 89. 

"Morris Hillquit, Loose Leaves from a Busy Life (New York: Macmillan, 1934), p. 81. 

12 Wise, op. cit., p. 647 

Leon Trotsky, The Bolsheviki and World Peace (New York: Boni & Liveright, 1918). 

14 In May 1973 Chase Manhattan Bank (chairman, David Rockefeller) opened it Moscow 
office at 1 Karl Marx Square, Moscow. The New York office is at 1 Chase Manhattan Plaza. 

15 Chicago: Public Publishin, n.d. 

16 Ibid. 

U.S., Senate, Bolshevik Propaganda, hearings before a subcommittee of the Committee on 
the Judiciary, 65th Cong., pp. 679-80. See also herein p. 107 for the role of Williams in 
Radek's Press Bureau. 

See Antony C. Sutton, Western Technology and Soviet Economic Development, 3 vols. 
(Stanford, Calif: Hoover Institution, 1968, 1971, 1973); see also National Suicide: Military 
Aid to the Soviet Union (New York: Arlington House, 1973). 

• • • 

Appendix I 

(AS IN 1917-1918) 


J. Ogden Armour 

G. J. Baldwin 

C. A. Coffin 

W. E. Corey 

Robert Dollar 

Pierre S. duPont 

Philip A. S. Franklin 

J. P. Grace 

R. F. Herrick 

Otto H. Kahn 

H. W. Pritchett 

Percy A. Rockefeller 
John D. Ryan 
W.L. Saunders 
JA. Stillman 
CA. Stone 
T.N. Vail 
F.A. Vanderlip 
E.S. Webster 
A.H. Wiggin 
Beckman Winthrop 
William Woodward 


J. N. Hill 

A. B. Hepburn 

S. H. Miller 

C. M. Schwab 

H. Bendicott 

Guy E. Tripp 

Newcomb Carlton 
D.C. Jackling 
E.R. Tinker 
A.H. Wiggin 
John J. Mitchell 


Charles B. Alexander 

Henry E. Huntington 

Albert B. Boardman 

Edward T. Jeffrey 

Robert. C. Clowry 

Otto H. Kahn 

Howard E. Cole 

Alvin W. Krech 

Henry E. Cooper 

James W. Lane 

Paul D. Cravath 

Hunter S. Marston 

Franklin Wm. Cutcheon 

Charles G. Meyer 

Bertram Cutler 

George Welwood Murray 

Thomas de Witt Cuyler 

Henry H. Pierce 

Frederick W. Fuller 

Winslow S. Pierce 

Robert Goelet 

Lyman Rhoades 

• • • 

Carl R. Gray Walter C. Teagle 

Charles Hayden Henry Rogers Winthrop 

Bertram G. Work 

Daniel G. Wing, Boston, District No. 1 
J. P. Morgan, New York, District No. 2 
Levi L. Rue, Philadelphia, District No. 3 
W. S. Rowe, Cincinnati, District No. 4 
J. W. Norwood, Greenville, S.C., District No. 5 
C. A. Lyerly, Chattanooga, District No. 6 
J. B. Forgan, Chicago, Pres., District No. 7 
Frank O. Watts, St. Louis, District No. 8 
C. T. Jaffray, Minneapolis, District No. 9 
E. F. Swinney, Kansas City, District No. 10 
T. J. Record, Paris, District No. 11 
Herbert Fleishhacker, San Francisco, District No. 12 


William Woodward (1917) 

Robert H. Treman (1918) Class A 

Franklin D.Locke (1919) 

Charles A. Stone (1920) 

Wm. B. Thompson (1918) Class B 

L.R. Palmer (1919) 

Pierre Jay (1917) 

George F. Peabody (1919) ^^ Q 

William Lawrence Saunders 


William G. M'Adoo Adolph C. Miller (1924) 

Charles S . Hamlin (1916) Frederic A. Delano ( 1 920) 

Paul M. Warburg (1918) W.P.G. Harding (1922) 

John Skelton Williams 

• • • 


Alexander J. Hemphill 

Charles H. Allen 

A. C. Bedford 

Edward J. Berwind 

W. Murray Crane 

T. de Witt Cuyler 

James B. Duke 

Caleb C. Dula 

Robert W. Goelet 

Daniel Guggenheim 

W. Averell Harriman 

Albert H. Harris 

Walter D. Hines 

Augustus D. Julliard 

Thomas W. Lamont 

William C. Lane 

COMPANY (140 Broadway) 

Edgar L. Marston 
Grayson M-P Murphy 
Charles A. Peabody 
William C. Potter 
John S. Runnells 
Thomas F. Ryan 
Charles H. Sabin 
John W. Spoor 
Albert Straus 
Harry P. Whitney 
Thomas E. Wilson 
London Committee: 
Arthur J. Fraser (Chairman) 
Cecil F. Parr 
Robert Callander 


P. A. S. Franklin 

J.P. Grace 

G. H. Dodge 

H. A. C. Taylor 

R. S. Lovett 

F. A. Vanderlip 

G. H. Miniken 
E. P. Swenson 
Frank Trumbull 
Edgar Palmer 

PA. Rockefeller 
James Stillman 
W. Rockefeller 
J. O. Armour 
JW. Sterling 
JA. Stillman 
M.T. Pyne 
E.D. Bapst 
J.H. Post 
W.C. Procter 

(As in 1914, Hjalmar Schacht joined board in 1918) 
Emil Wittenberg Hans Winterfeldt 

Hjalmar Schacht Th Marba 

Martin Schiff Paul Koch 

Franz Rintelen 

• • • 


Harry F. Sinclair James N. Wallace 

H. P. Whitney Edward H. Clark 

Wm. E. Corey Daniel C. Jackling 

Wm. B. Thompson Albert H. Wiggin 


James Brown 
Douglas Campbell 
G. C. Clark, Jr. 
Bayard Dominick, Jr. 
A. G. Hodenpyl 
T. W. Lamont 
Marion McMillan 
J. H. Pardee 
G. H. Walbridge 
E. N. Chilson 
A. N. Connett 

C.E. Bailey 
J.G. White 
Gano Dunn 
E.G. Williams 
A.S. Crane 
H.A. Lardner 
G.H. Kinniat 
A.F. Kountz 
R.B. Marchant 
Henry Parsons 

• • • 

Appendix II 


There is an extensive literature in English, French, and German reflecting the argument that the 
Bolshevik Revolution was the result of a "Jewish conspiracy"; more specifically, a conspiracy by 
Jewish world bankers. Generally, world control is seen as the ultimate objective; the Bolshevik 
Revolution was but one phase of a wider program that supposedly reflects an age-old religious 
struggle between Christianity and the "forces of darkness." 

The argument and its variants can be found in the most surprising places and from quite surprising 
persons. In February 1920 Winston Churchill wrote an article — rarely cited today — for the 
London Illustrated Sunday Herald entitled "Zionism Versus Bolshevism." In this' article Churchill 
concluded that it was "particularly important... that the National Jews in every country who are 
loyal to the land of their adoption should come forward on every occasion . . . and take a prominent 
part in every measure for combatting the Bolshevik conspiracy." Churchill draws a line between 
"national Jews" and what he calls "international Jews." He argues that the "international and for the 
most atheistical Jews" certainly had a "very great" role in the creation of Bolshevism and bringing 
about the Russian Revolution. He asserts (contrary to fact) that with the exception of Lenin, "the 
majority" of the leading figures in the revolution were Jewish, and adds (also contrary to fact) that 
in many cases Jewish interests and Jewish places of worship were excepted by the Bolsheviks from 
their policies of seizure. Churchill calls the international Jews a "sinister confederacy" emergent 
from the persecuted populations of countries where Jews have been persecuted on account of their 
race. Winston Churchill traces this movement back to Spartacus-Weishaupt, throws his literary net 
around Trotsky, Bela Kun, Rosa Luxemburg, and Emma Goldman, and charges: "This world-wide 
conspiracy for the overthrow of civilisation and for the reconstitution of society on the basis of 
arrested development, of envious malevolence, and impossible equality, has been steadily growing." 

Churchill then argues that this conspiratorial Spartacus-Weishaupt group has been the mainspring of 
every subversive movement in the nineteenth century. While pointing out that Zionism and 
Bolshevism are competing for the soul of the Jewish people, Churchill (in 1920) was preoccupied 
with the role of the Jew in the Bolshevik Revolution and the existence of a worldwide Jewish 

Another well-known author in the 1920s, Henry Wickham Steed describes in the second volume of 
his Through 30 Years 1892-1922 (p. 302) how he attempted to bring the Jewish-conspiracy concept 
to the attention of Colonel Edward M. House and President Woodrow Wilson. One day in March 
1919 Wickham Steed called Colonel House and found him disturbed over Steed's recent criticism of 
U.S. recognition of the Bolsheviks. Steed pointed out to House that Wilson would be discredited 
among the many peoples and nations of Europe and "insisted that, unknown to him, the prime 
movers were Jacob Schiff, Warburg and other international financiers, who wished above all to 
bolster up the Jewish Bolshevists in order to secure a field for German and Jewish exploitation of 
Russia."- According to Steed, Colonel House argued for the establishment of economic relations 
with the Soviet Union. 

Probably the most superficially damning collection of documents on the Jewish conspiracy is in the 
State Department Decimal File (861.00/5339). The central document is one entitled "Bolshevism 
and Judaism," dated November 13, 1918. The text is in the form of a report, which states that the 
revolution in Russia was engineered "in February 1916" and "it was found that the following 
persons and firms were engaged in this destructive work": 


(1) Jacob Schiff 


(2) Kuhn, Loeb & Company 

Jewish Firm 

Management: Jacob Schiff 


Felix Warburg 


Otto H. Kahn 


Mortimer L. Schiff 


Jerome J. Hanauer 


(3) Guggenheim 


(4) Max Breitung 


(5) Isaac Seligman 


The report goes on to assert that there can be no doubt that the Russian Revolution was started and 
engineered by this group and that in April 1917 

Jacob Schiff in fact made a public announcement and it was due to his financial influence 
that the Russian revolution was successfully accomplished and in the Spring 1917 Jacob 
Schitf started to finance Trotsky, a Jew, for the purpose of accomplishing a social revolution 
in Russia. 

The report contains other miscellaneous information about Max Warburg's financing of Trotsky, the 
role of the Rheinish-Westphalian syndicate and Olof Aschberg of the Nya Banken (Stockholm) 
together with Jivotovsky. The anonymous author (actually employed by the U.S. War Trade 
Board) 2 states that the links between these organizations and their financing of the Bolshevik 
Revolution show how "the link between Jewish multi-millionaires and Jewish proletarians was 
forged." The report goes on to list a large number of Bolsheviks who were also Jews and then 
describes the actions of Paul Warburg, Judus Magnes, Kuhn, Loeb & Company, and Speyer & 

The report ends with a barb at "International Jewry" and places the argument into the context of a 
Christian- Jewish conflict backed up by quotations from the Protocols of Zion. Accompanying this 
report is a series of cables between the State Department in Washington and the American embassy 
in London concerning the steps to be taken with these documents;- 

5399 Great Britain, TEL. 3253 i pm 

October 16, 1919 In Confidential File 

Secret for Winslow from Wright. Financial aid to Bolshevism & Bolshevik Revolution in 
Russia from prominent Am. Jews: Jacob Schiff, Felix Warburg, Otto Kahn, Mendell Schiff, 
Jerome Hanauer, Max Breitung & one of the Guggenheims. Document re- in possession of 
Brit, police authorities from French sources. Asks for any facts re-. 

Oct. 17 Great Britain TEL. 6084, noon r c-h 5399 Very secret. Wright from Winslow. 
Financial aid to Bolshevik revolution in Russia from prominent Am. Jews. No proof re- but 
investigating. Asks to urge Brit, authorities to suspend publication at least until receipt of 
document by Dept. 

• • • 

Nov. 28 Great Britain TEL. 6223 R 5 pro. 5399 

FOR WRIGHT. Document re financial aid to Bolsheviki by prominent American jews. 
Reports — identified as French translation of a statement originally prepared in English by 
Russian citizen in Am. etc. Seem most unwise to give — the distinction of publicity. 

It was agreed to suppress this material and the files conclude, "I think we have the whole thing in 
cold storage." 

Another document marked "Most Secret" is included with this batch of material. The provenance of 
the document is unknown; it is perhaps FBI or military intelligence. It reviews a translation of the 
Protocols of the Meetings of the Wise Men of Zion, and concludes: 

In this connection a letter was sent to Mr. W. enclosing a memorandum from us with regard 
to certain information from the American Military Attache to the effect that the British 
authorities had letters intercepted from various groups of international Jews setting out a 
scheme for world dominion. Copies of this material will be very useful to us. 

This information was apparently developed and a later British intelligence report makes the flat 

SUMMARY: There is now definite evidence that Bolshevism is an international movement 
controlled by Jews; communications are passing between the leaders in America, France, 
Russia and England with a view to concerted action.... - 

However, none of the above statements can be supported with hard empirical evidence. The most 
significant information is contained in the paragraph to the effect that the British authorities 
possessed "letters intercepted from various groups of international Jews setting out a scheme for 
world dominion." If indeed such letters exist, then they would provide support (or nonsupport) for a 
presently unsubstantiated hypothesis: to wit, that the Bolshevik Revolution and other revolutions 
are the work of a worldwide Jewish conspiracy. 

Moveover, when statements and assertions are not supported by hard evidence and where attempts 
to unearth hard evidence lead in a circle back to the starting point — particularly when everyone is 
quoting everyone else — then we must reject the story as spurious. There is no concrete evidence 
that Jews were involved in the Bolshevik Revolution because they were Jewish. There may indeed 
have been a higher proportion of Jews involved, but given tsarist treatment of Jews, what else 
would we expect? There were probably many Englishmen or persons of English origin in the 
American Revolution fighting the redcoats. So what? Does that make the American Revolution an 
English conspiracy? Winston Churchill's statement that Jews had a "very great role" in the 
Bolshevik Revolution is supported only by distorted evidence. The list of Jews involved in the 
Bolshevik Revolution must be weighed against lists of non-Jews involved in the revolution. When 
this scientific procedure is adopted, the proportion of foreign Jewish Bolsheviks involved falls to 
less than twenty percent of the total number of revolutionaries — and these Jews were mostly 
deported, murdered, or sent to Siberia in the following years. Modern Russia has in fact maintained 
tsarist anti-Semitism. 

It is significant that documents in the State Department files confirm that the investment banker 
Jacob Schiff, often cited as a source of funds for the Bolshevik Revolution, was in fact against 
support of the Bolshevik regime.- This position, as we shall see, was in direct contrast to the 
Morgan-Rockefeller promotion of the Bolsheviks. 

The persistence with which the Jewish-conspiracy myth has been pushed suggests that it may well 
be a deliberate device to divert attention from the real issues and the real causes. The evidence 


provided in this book suggests that the New York bankers who were also Jewish had relatively 
minor roles in supporting the Bolsheviks, while the New York bankers who were also Gentiles 
(Morgan, Rockefeller, Thompson) had major roles. 

What better way to divert attention from the real operators than by the medieval bogeyman of anti- 


! See Appendix 3 for Schiff s actual role. 

2 The anonymous author was a Russian employed by the U.S. War Trade Board. One of the 
three directors of the U.S. War Trade Board at this time was John Foster Dulles. 

3 U.S. State Dept. Decimal File, 861.00/5399. 

4 Great Britain, Directorate of Intelligence, A Monthly Review of the Progress of 
Revolutionary Movements Abroad, no. 9, July 16, 1913 (861.99/5067). 

5 See Appendix 3. 

• • • 



Note: Some documents comprise several papers that form a related group. 

DOCUMENT NO. 1 Cable from Ambassador Francis in Petrograd to U.S. State Department and 
related letter from Secretary of State Robert Lansing to President Woodrow Wilson (March 17, 

DOCUMENT NO. 2 British Foreign Office document (October 1917) claiming Kerensky was in 
the pay of the German government and aiding the Bolsheviks 

DOCUMENT NO. 3 Jacob Schiff of Kuhn, Loeb & Company and his position on the Kerensky and 
Bolshevik regimes (November 1918) 

DOCUMENT NO. 4 Memorandum from William Boyce Thompson, director of the Federal 
Reserve Bank of New York, to the British prime minister David Lloyd George (December 1917) 

DOCUMENT NO. 5 Letter from Felix Frankfurter to Soviet agent Santeri Nuorteva (May 9, 1918) 

DOCUMENT NO. 6 Personnel of the Soviet Bureau, New York, 1920; list from the New York 
State Lusk Committee files 

DOCUMENT NO. 7 Letter from National City Bank to the U.S. Treasury referring to Ludwig 
Martens and Dr. Julius Hammer (April 15, 1919) 

DOCUMENT NO. 8 Letter from Soviet agent William (Bill) Bobroff to Kenneth Durant (August 3, 

DOCUMENT NO. 9 Memo referring to a member of the J. P. Morgan firm and the British director 
of propaganda Lord Northcliffe (April 13, 1918) 

DOCUMENT NO. 10 State Department Memo (May 29, 1922) regarding General Electric Co. 


Cable from Ambassador Francis in Petrograd to the Department of State in Washington, D.C., dated 
March 14, 1917, and reporting the first stage of the Russian Revolution (861.00/273). 


Dated March 14, 1917, 

Reed. 15th, 2:30 a.m. 

Secretary of State, 


1287. Unable to send a cablegram since the eleventh. Revolutionists have absolute control in 
Petrograd and are making strenuous efforts to preserve order, which successful except in rare 
instances. No cablegrams since your 1251 of the ninth, received March eleventh. Provisional 
government organized under the authority of the Douma which refused to obey the Emperor's order 
of the adjournment. Rodzianko, president of the Douma, issuing orders over his own signature. 
Ministry reported to have resigned. Ministers found are taken before the Douma, also many Russian 
officers and other high officials. Most if not all regiments ordered to Petrograd have joined the 
revolutionists after arrival. American colony safe. No knowledge of any injuries to American 


American Ambassador 

On receipt of the preceding cable, Robert Lansing, Secretary of State, made its contents available to 
President Wilson (861.00/273): 


My Dear Mr. President: 

I enclose to you a very important cablegram which has just come from Petrograd, and also a 
clipping from the New York WORLD of this morning, in which a statement is made by Signor 
Scialoia, Minister without portfolio in the Italian Cabinet, which is significant in view of Mr. 
Francis' report. My own impression is that the Allies know of this matter and I presume are 
favorable to the revolutionists since the Court party has been, throughout the war, secretely pro- 

Faithfully yours, 

The President, 
The White House 


The significant phrase in the Lansing- Wilson letter is "My own impression is that the Allies know 
of this matter and I presume are favorable to the revolutionists since the Court party has been, 
throughout the war, secretely pro-German." It will be recalled (chapter two) that Ambassador Dodd 
claimed that Charles R. Crane, of Westinghouse and of Crane Co. in New York and an adviser to 
President Wilson, was involved in this first revolution. 


Memorandum from Great Britain Foreign Office file FO 371/ 2999 (The War — Russia), October 
23, 1917, file no. 3743. 


Personal (and) Secret. 

• • • 

Disquieting rumors have reached us from more than one source that Kerensky is m German pay and 
that he and his government are doing their utmost to weaken (and) disorganize Russia, so as to 
arrive at a situation when no other course but a separate peace would be possible. Do you consider 
that there is any ground for such insinuations, and that the government by refraining from any 
effective action are purposely allowing the Bolshevist elements to grow stronger? 

If it should be a question of bribery we might be able to compete successfully if it were known how 
and through what agents it could be done, although it is not a pleasant thought. 


Refers to information that Kerensky was in German pay. 


Consists of four parts: 

(a) Cable from Ambassador Francis, April 27, 1917, in Petrograd to Washington, D.C., requesting 
transmission of a message from prominent Russian Jewish bankers to prominent Jewish bankers in 
New York and requesting their subscription to the Kerensky Liberty Loan (861.51/139). 

(b) Reply from Louis Marshall (May 10, 1917) representing American Jews; he declined the 
invitation while expressing support for the American Liberty Loan (861.51/143). 

(c) Letter from Jacob Schiff of Kuhn, Loeb (November 25, 1918) to State Department (Mr. Polk) 
relaying a message from Russian Jewish banker Kamenka calling for Allied help against the 
Bolsheviks ("because Bolshevist government does not represent Russian People"). 

(d) Cable from Kamenka relayed by Jacob Schiff. 


(a) Secretary of State 


1229, twenty-seventh. 

Please deliver following to Jacob Schiff, Judge Brandies [sic], Professor Gottheil, Oscar Strauss 
[sic], Rabbi Wise, Louis Marshall and Morgenthau: 

"We Russian Jews always believed that liberation of Russia meant also our liberation. Being deeply 
devoted to country we placed implicit trust temporary Government. We know the unlimited 
economic power of Russia and her immense natural resources and the emancipation we obtained 
will enable us to participate development country. We firmly believe that victorious finish of the 
war owing help our allies and United States is near. 

Temporary Government issuing now new public loan of freedom and we feel our national duty 
support loan high vital for war and freedom. We are sure that Russia has an unshakeable power of 
public credit and will easily bear a. 1 1 necessary financial burden. We formed special committee of 
Russian Jews for supporting loan consisting representatives financial, industrial trading circles and 
leading public men. 

• • • 

We inform you here of and request our brethern beyong [sic] the seas to support freedom of Russian 
which became now case humanity and world's civilization. We suggest you form there special 
committee and let us know of steps you may take Jewish committee support success loan of 
freedom. Boris Kamenka, Chairman, Baron Alexander Gunzburg, Henry Silosberg." 


(b) Dear Mr. Secretary: 

After reporting to our associates the result of the interview which you kindly granted to Mr. 
Morgenthau, Mr. Straus and myself, in regard to the advisability of calling for subscriptions to the 
Russian Freedom Loan as requested in the cablegram of Baron Gunzburg and Messrs. Kamenka 
and Silosberg of Petrograd, which you recently communicated to us, we have concluded to act 
strictly upon your advice. Several days ago we promised our friends at Petrograd an early reply to 
their call for aid. We would therefore greatly appreciate the forwarding of the following cablegram, 
provided its terms have your approval: 

"Boris Kamenka, 

Don Azov Bank, Petrograd. 

Our State Department which we have consulted regards any present attempt toward securing 
public subscriptions here for any foreign loans inadvisable; the concentration of all efforts 
for the success of American war loans being essential, thereby enabling our Government to 
supply funds to its allies at lower interest rates than otherwise possible. Our energies to help 
the Russian cause most effectively must therefore necessarily be directed to encouraging 
subscriptions to American Liberty Loan. Schiff, Marshall, Straus, Morgenthau, Wise, 

You are of course at liberty to make any changes in the phraseology of this suggested cablegram 
which you may deem desirable and which will indicate that our failure to respond directly to the 
request that has come to us is due to our anxiety to make our activities most efficient. 

May I ask you to send me a copy of the cablegram as forwarded, with a memorandum of the cost so 
that the Department may be promptly reimbursed. 

I am, with great respect, 

Faithfully yours, 

[sgd.] Louis Marshall 

The Secretary of State 
Washington, D.C. 

(c) Dear Mr. Polk: 

Will you permit me to send you copy of a cablegram received this morning and which I think, for 
regularity's sake, should be brought to the notice of the Secretary of State or your good self, for 
such consideration as it might be thought well to give this. 

Mr. Kamenka, the sender of this cablegram, is one of the leading men in Russia and has, I am 
informed, been financial advisor both of the Prince Lvoff government and of the Kerensky 


government. He is President of the Banque de Commerce de l'Azov Don of Petrograd, one of the 
most important financial institutions of Russia, but had, likely, to leave Russia with the advent of 
Lenin and his "comrades." 

Let me take this opportunity to send sincere greetings to you and Mrs. Polk and to express the hope 
that you are now in perfect shape again, and that Mrs. Polk and the children are in good health. 

Faithfully yours, 
[sgd.] Jacob H. Schiff 

Hon. Frank L. Polk 
Counsellor of the State Dept. 
Washington, D.C. 


[Dated November 25, 1918] 

(d) Translation: 

The complete triumph of liberty and right furnishes me a new opportunity to repeat to you my 
profound admiration for the noble American nation. Hope to see now quick progress on the part of 
the Allies to help Russia in reestablishing order. Call your attention also to pressing necessity of 
replacing in Ukraine enemy troops at the very moment of their retirement in order to avoid 
Bolshevist devastation. Friendly intervention of Allies would be greeted everywhere with 
enthusiasm and looked upon as democratic action, because Bolshevist government does not 
represent Russian people. Wrote you September 19th. Cordial greetings. 

[sgd.] Kamenka 


This is an important series because it refutes the story of a Jewish bank conspiracy behind the 
Bolshevik Revolution. Clearly Jacob Schiff of Kuhn, Loeb was not interested in supporting the 
Kerensky Liberty Loan and Schiff went to the trouble of drawing State Department attention to 
Kamenka's pleas for Allied intervention against the Bolsheviks. Obviously Schiff and fellow banker 
Kamenka, unlike J.P. Morgan and John D. Rockefeller, were as unhappy about the Bolsheviks as 
they had been about the tsars. 



Memorandum from William Boyce Thompson (director of the Federal Reserve Bank of New York) 
to Lloyd George (prime minister of Great Britain), December 1917. 




The Russian situation is lost and Russia lies entirely open to unopposed German exploitation unless 
a radical reversal of policy is at once undertaken by the Allies. 


Because of their shortsighted diplomacy, the Allies since the Revolution have accomplished nothing 
beneficial, and have done considerable harm to their own interests. 


The Allied representatives in Petrograd have been lacking in sympathetic understanding of the 
desire of the Russian people to attain democracy. Our representatives were first connected officially 
with the Czar's regime. Naturally they have been influenced by that environment. 


Meanwhile, on the other hand, the Germans have conducted propaganda that has undoubtedly aided 
them materially in destroying the Government, in wrecking the army and in destroying trade and 
industry. If this continues unopposed it may result in the complete exploitation of the great country 
by Germany against the Allies. 


I base my opinion upon a careful and intimate study of the situation both outside and inside official 
circles, during my stay in Petrograd between August 7 and November 29, 1917. 


"What can be done to improve the situation of the Allies in Russia"? 

The diplomatic personnel, both British and American, should be changed to one democratic in spirit 
and capable of sustaining democratic sympathy. 

There should be erected a powerful, unofficial committee, with headquarters in Petrograd, to 
operate in the background, so to speak, the influence of which in matters of policy should be 
recognized and accepted by the DIPLOMATIC, CONSULAR and MILITARY officials of the 
Allies. Such committee should be so composed in personnel as to make it possible to entrust to it 
wide discretionary powers. It would presumably undertake work in various channels. The nature of 
which will become obvious as the task progress, es; it. would aim to meet all new conditions as they 
might arise. 


It is impossible now to define at all completely the scope of this new Allied committee. I can 
perhaps assist to a better understanding of its possible usefulness and service by making a brief 
reference to the work which I started and which is now in the hands of Raymond Robins, who is 
well and favorably known to Col. Buchan — a work which in the future will undoubtedly have to 
be somewhat altered and added to in order to meet new conditions. My work has been performed 
chiefly through a Russian "Committee on Civic Education" aided by Madame Breshkovsky, the 
Grandmother of the Revolution. She was assisted by Dr. David Soskice, the private secretary of the 
then Prime Minister Kerensky (now of London); Nicholas Basil Tchaikovsky, at one time Chairman 
of the Peasants Co-operative Society, and by other substantial social revolutionaries constituting the 
saving element of democracy as between the extreme "Right" of the official and property-owning 
class, and the extreme "Left" embodying the most radical elements of the socialistic parties. The 


aim of this committee, as stated in a cable message from Madame Breshkovsky to President 
Wilson, can be gathered from this quotation: "A widespread education is necessary to make Russia 
an orderly democracy. We plan to bring this education to the soldier in the camp, to the workman in 
the factory, to the peasant in the village." Those aiding in this work realized that for centuries the 
masses had been under the heel of Autocracy which had given them not protection but oppression; 
that a democratic form of government in Russian could be maintained only BY THE DEFEAT OF 
Russia, unprepared for great governmental responsibilities, uneducated, untrained, be expected long 
to survive with imperial Germany her next door neighbor? Certainly not. Democratic Russia would 
become speedily the greatest war prize the world has even known. 

The Committee designed to have an educational center in each regiment of the Russian army, in the 
form of Soldiers' Clubs. These clubs were organized as rapidly as possible, and lecturers were 
employed to address the soldiers. The lecturers were in reality teachers, and it should be 
remembered that there is a percentage of 90 among the soldiers of Russia who can neither read nor 
write. At the time of the Bolshevik outbreak many of these speakers were in the field making a fine 
impression and obtaining excellent results. There were 250 in the city of Moscow alone. It was 
contemplated by the Committee to have at least 5000 of these lecturers. We had under publication 
many newspapers of the "A B C" class, printing matter in the simplest style, and were assisting 
about 100 more. These papers carried the appeal for patriotism, unity and co-ordination into the 
homes of the workmen and the peasants. 

After the overthrow of the last Kerensky government we materially aided the dissemination of the 
Bolshevik literature, distributing it through agents and by aeroplanes to the German army. If the 
suggestion is permissible, it might be well to consider whether it would not be desirable to have this 
same Bolshevik literature sent into Germany and Austria across the West and Italian fronts. 


The presence of a small number of Allied troops in Petrograd would certainly have done much to 
prevent the overthrow of the Kerensky government in November. I should like to suggest for your 
consideration, if present conditions continue, the concentration of all the British and French 
Government employes in Petrograd, and if the necessity should arise it might be formed into a fairly 
effective force. It might be advisable even to pay a small sum to a Russian force. There is also a 
large body of volunteers recruited in Russia, many of them included in the Inteligentzia of "Center" 
class, and these have done splendid work in the trenches. They might properly be aided. 


If you ask for a further programme I should say that it is impossible to give it now. I believe that 
intelligent and courageous work will still prevent Germany from occupying the field to itself and 
thus exploiting Russia at the expense of the Allies. There will be many ways in which this service 
can be rendered which will become obvious as the work progresses. 


Following this memorandum the British war cabinet changed its policy to one of tepid pro- 
Bolshevism. Note that Thompson admits to distribution of Bolshevik literature by his agents. The 
confusion over the date on which Thompson left Russia (he states November 29th in this document) 
is cleared up by the Pirnie papers at the Hoover Institution. There were several changes of travel 
plans and Thompson was still in Russia in early December. The memorandum was probably written 
in Petrograd in late November. 

• • • 



Letter dated May 9, 1918, from Felix Frankfurter (then special assistant to the secretary of war) to 
Santeri Nuorteva (alias for Alexander Nyberg), a Bolshevik agent in the United States. Listed as 
Document No. 1544 in the Lusk Committee files, New York: 



May 9, 1918 

My dear Mr. Nhorteva [sic]: 

Thank you very much for your letter of the 4th. I knew you would understand the purely friendly 
and wholly unofficial character of our talk, and I appreciate the prompt steps you have taken to 
correct your Sirola* letter. Be wholly assured that nothing has transpired which diminishes my 
interest in the questions which you present. Quite the contrary. I am much interested in** the 
considerations you are advancing and for the point of view you are urging. The issues *** at stake 
are the interests that mean much for the whole world. To meet them adequately we need all the 
knowledge and wisdom we can possibly get **** . 

Cordially yours, 
Felix Frankfurter 

Santeri Nuorteva, Esq. 

* Yrjo Sirola was a Bolshevik and commissar in Finland. 
** Original text, "continually grateful to you for." 

*** Original text, "interests." 

**** Original text added "these days. 


This letter by Frankfurter was written to Nuorteva/Nyberg, a Bolshevik agent in the United States, 
at a time when Frankfurter held an official position as special assistant to Secretary of War Baker in 
the War Department. Apparently Nyberg was willing to change a letter to commissar "Sirola" 
according to Frankfurter's instructions. The Lusk Committee acquired the original Frankfurter draft 
including Frankfurter's changes and not the letter received by Nyberg. 


Position Name Citizenship Born Former Employment 

Representative Ludwig C.A.K. German Russia V-P of Weinberg & 

of USSR MARTENS Posner Engineer ing 

(120 Broadway) 

Office manager Gregory WEINSTEIN Russian Russia Journalist 




Santeri NUORTEVA Finnish 
Kenneth DURANT U.S. 

Private secre Dorothy KEEN U.S. 

tary to NUOR 


Translator Mary MODELL Russian 

File clerk Alexander COLEMAN U.S. 

Telephone clerk Blanche Russian 


Office attendant Nestor Russian 





(1) U.S. Committee 
on Public Information 

(2) Former aide to 
Colonel House 


High school 


School in Russia 


High school 


High school 


Military expert 

Lt. Col. Boris Tagueeff Russian 


Military critic on 

Roustam BEK 

Daily Express 

Commercial Department 





International Oxy gen 


Ella TUCH 



U.S. firms 





Gary School League 





Social worker 










Russian Army 

Information Department 


Evans CLARK 



Princeton University 





Ford Peace 


Etta FOX 



War Trade Board 

Wilfred R. 


American Red Cross 


Technical Depi 



Arthur ADAMS 




Educational Dept. 





Columbia University 

Medical Dept. 





Medical doctor 




Medical doctor 

Legal Dept. 


Counsel retained: 

Charles RECHT 

Dudley Field 


• • • 

George Cordon 

Dept. of Economics & Statistics 





U.S. Bureau of 




National Child 
Labor Commission 






Editorial Staff of Soviet Russia 


Jacob w. 



College of City 



of New York 



























U.S., House, Conditions in Russia 

! (Commil 

tee on Foreign Affai 

66th Cong., 3rd sess. (Washington, D.C., 1921). 

See also British list in U.S. State Department Decimal File, 316-22- 
656, which also has the name of Julius Hammer. 



Letter from National City Bank of New York to the U.S. Treasury, April 15, 1919, with regard to 
Ludwig Martens and his associate Dr. Julius Hammer (316-118). 


The National City Bank of New York 
New York, April 15, 1919 

Honorable Joel Rathbone, 
Assistant Secretary of the Treasury 
Washington, D.C. 

Dear Mr. Rathbone: 

I beg to hand you herewith photographs of two documents which we have received this morning by 
registered mail from a Mr. L. Martens who claims to be the representative in the United States of 
the Russian Socialist Federal Soviet Republic, and witnessed by a Dr. Julius Hammer for the Acting 
Director of the Financial Department. 

• • • 

You will see from these documents that there is a demand being made upon us for any and all funds 
on deposit with us in the name of Mr. Boris Bakhmeteff, alleged Russian Ambassador in the United 
States, or in the name of any individual, committee, or mission purporting to act in behalf of the 
Russian Government in subordination to Mr. Bakhmeteff or directly. 

We should be very glad to receive from you whatever advice or instructions you may care to give us 
in this matter. 

Yours respectfully, 

[sgd.] J. H. Carter, 

Vice President. 




The significance of this letter is related to the long-time association (1917-1974) of the Hammer 
family with the Soviets. 



Letter dated August 3, 1920, from Soviet courier "Bill" Bobroff to Kenneth Durant, former aide to 
Colonel House. Taken from Bobroff by U.S. Department of Justice. 


Department of Justice 

Bureau of Investigation, 

15 Park Row, New York City, N. Y., 

August 10, 1920 

Director Bureau of Investigation 

United States Department of Justice, Washington, D.C. 

Dear Sir: Confirming telephone conversation with Mr. Ruch today, I am transmitting herewith 
original documents taken from the effects of B. L. Bobroll, steamship Frederick VIII. 

The letter addressed Mr. Kenneth Durant, signed by Bill, dated August 3, 1920, together with the 
translation from "Pravda," July 1, 1920, signed by Trotzki, and copies of cablegrams were found 
inside the blue envelope addressed Mr. Kenneth Durant, 228 South Nineteenth Street, Philadelphia, 
Pa. This blue envelope was in turn sealed inside the white envelope attached. 

Most of the effects of Mr. Bobroff consisted of machinery catalogues, specifications, 
correspondence regarding the shipment of various equipment, etc., to Russian ports. Mr. Bobroff 

• • • 

was closely questioned by Agent Davis and the customs authorities, and a detailed report of same 
will be sent to Washington. 

Very truly yours, 

G. F. Lamb, 

Division Superintendent 


Dear Kenneth: Thanks for your most welcome letter. I have felt very much cut off and hemmed in, 
a feeling which has been sharply emphasized by recent experiences. I have felt distressed at 
inability to force a different attitude toward the bureau and to somehow get funds to you. To cable 
$5,000 to you, as was done last week, is but a sorry joke. I hope the proposal to sell gold in 
America, about which we have been cabling recently, will soon be found practicable. Yesterday we 
cabled asking if you could sell 5,000,000 rubles at a minimum of 45 cents, present market rate 
being 51.44 cents. That would net at least $2,225,000. L's present need is $2,000,000 to pay Niels 
Juul & Co., in Christiania, for the first part of the coal shipment from America to Vardoe, 
Murmansk, and Archangel. The first ship is nearing Vardoe and the second left New York about 
July 28. Altogether, Niels Juul & Co., or rather the Norges' Bank, of Christiania, on their and our 
account, hold $11,000,000 gold rubles of ours, which they themselves brought from Reval to 
Christiania, as security for our coal order and the necessary tonnage, but the offers for purchase of 
this gold that they have so far been able to get are very poor, the best being $575 per kilo, whereas 
the rate offered by the American Mint or Treasury Department is now $644.42, and considering the 
large sum involved it would be a shame to let it go at too heavy a loss. I hope that ere you get this 
you will have been able to effect the sale, at the same time thus getting a quarter of a million dollars 
or more for the bureau. If we can't in some way pay the $2,000,000 in Christiania, that was due four 
days ago, within a very short time, Niels Juul & Co. will have the right to sell our gold that they 
now hold at the best price then obtainable, which, as stated above, is quite low. 

We don't know yet how the Canadian negotiations are going on. We understand Nuorteva turned 
over the strings to Shoen when N.'s arrest seemed imminent. We don't at this writing know where 
Nuorteva is. Our guess is that after his enforced return to England from Esbjerg, Denmark, Sir Basil 
Thomson had him shipped aboard a steamer for Reval, but we have not yet heard from Reval that 
he has arrived there, and we certainly would hear from Goukovski or from N. himself. Humphries 
saw Nuorteva at Esbjerg, and is himself in difficulties with the Danish police because of it. All his 
connections are being probed for; his passport has been taken away: he has been up twice for 
examination, and it looks as if he will be lucky if he escapes deportation. It was two weeks ago that 
Nuorteva arrived at Esbjerg, 300 miles from here, but having no Danish vise, the Danish authorities 
refused to permit him to land, and he was transferred to a steamer due to sail at 8 o'clock the 
following morning. By depositing 200 kroner he was allowed shore leave for a couple of hours. 
Wanting to get Copenhagen on long-distance wire and having practically no more money, he once 
more pawned that gold watch of his for 25 kroner, therewith getting in touch with Humphries, who 
within half an hour jumped aboard the night train, slept on the floor, and arrived at Esbjerg at 7:30. 
Humphries found Nuorteva, got permission from the captain to go aboard, had 20 minutes with N., 
then had to go ashore and the boat sailed. Humphries was then invited to the police office by two 
plain-clothes men, who had been observing the proceedings. He was closely questioned, address 
taken, then released, and that night took train back to Copenhagen. He sent telegrams to Ewer, of 
Daily Herald, Shoen, and to Kliskho, at 128 New Bond Street, urging them to be sure and meet 
Nuorteva's boat, so that N. couldn't again be spirited away, but we don't know yet just what 
happened. The British Government vigorously denied that they had any intention of sending him to 
Finland. Moscow has threatened reprisals if anything happens to him. Meantime, the investigation 
of H. has begun. He was called upon at his hotel by the police, requested to go to headquarters (but 
not arrested), and we understand that his case is now before the minister of justice. Whatever may 


be the final outcome, Humphries comments upon the reasonable courtesy shown him, contrasting it 
with the ferocity of the Red raids in America. 

He found that at detective headquarters they knew of some of his outgoing letters and telegrams. 

I was interested in your favorable comment upon the Krassin interview of Tobenken's (you do not 
mention the Litvinoff one), because I had to fight like a demon with L. to get the opportunities for 
Tobenken. Through T. arrived with a letter from Nuorteva, as also did Arthur Ruhl, L. brusquely 
turned down in less than one minute the application T. was making to go into Russia, would hardly 
take time to hear him, saying it was impossible to allow two correspondents from the same paper to 
enter Russia. He gave a vise to Ruhl, largely because of a promise made last summer to Ruhl by L. 
Ruhl then went off to Reval, there to await the permission that L. had cabled asking Moscow to 
give. Tobenken, a nervous, almost a broken man because of his turn down, stayed here. I realized 
the mistake that had been made by the snap judgment, and started in on the job of getting it 
changed. Cutting a long story short, I got him to Reval with a letter to Goukovsky from L. In the 
meantime Moscow refused Ruhl, notwithstanding L's vise. L. was maddened at affront to his vise, 
and insisted that it be honored. It was, and Ruhl prepared to leave. Suddenly word came from 
Moscow to Ruhl revoking the permission and to Litvinoff, saying that information had reached 
Moscow that Ruhl was in service of State Department. At time of writing, both Tobenken and Ruhl 
are in Reval, stuck. 

I told L. this morning of the boat leaving tomorrow and of the courier B. available, asked him if he 
had anything to write to Martens, offered to take it in shorthand for him, but no, he said he had 
nothing to write about that I might perhaps send duplicates of our recent cables to Martens. 

Kameneff passed by here on a British destroyer en route to London, and didn't stop off here at all, 
and Krassin went direct from Stockholm. Of the negotiations, allied and Polish, and of the general 
situation you know about as much as we do here. L's negotiations with the Italians have finally 
resulted in establishing of mutual representation. Our representative, Vorovsky, has already gone to 
Italy and their representative, M. Gravina, is en route to Russia. We have just sent two ship loads of 
Russian wheat to Italy from Odessa. 

Give my regards to the people of your circle that I know. With all good wishes to you. 

Sincerely yours, 

The batch of letters you sent — 5 Cranbourne Road, Charlton cum Hardy, Manchester, has not yet 

L's recommendation to Moscow, since M. asked to move to Canada, is that M. should be appointed 
there, and that N., after having some weeks in Moscow acquainting himself first hand, should be 
appointed representative to America. 

L. is sharply critical of the bureau for giving too easily vises and recommendations. He was 
obviously surprised and incensed when B. reached here with contracts secured in Moscow upon 
strength of letters given to him by M. The later message from M. evidently didn't reach Moscow. 
What L. plans to do about it I don't know. I would suggest that M. cable in cipher his 
recommendation to L. in this matter. L. would have nothing to do with B. here. Awkward situation 
may be created. 

L. instanced also the Rabinoff recommendation. 

Two envelopes, Mr. Kenneth Durant, 228 South Nineteenth Street, Philadelphia, Pa., U.S.A. 


SOURCE: U.S. State Department Decimal File, 316-119-458/64. 

William (Bill) L. 

Kenneth DURANT 







Soviet courier and agent. Operated 
Bobroff Foreign Trading and Engineering 
Company of Milwaukee. Invented the 
voting system used in the Wisconsin 

Aide to Colonel House; see text. 

Employed by International Oxygen Co., 
owned by Heller, a prominent financier 
and Communist. 

Soviet agent, reporter for London Daily 

Soviet agent in Scandinavia 

Also known as Alexander Nyberg, first 
Soviet representative in United States; see 

Chief of British Intelligence 


Wilfred Humphries, associated with 
Martens and Litvinoff, member of Red 
Cross in Russia. 

Bolshevik commissar of trade and labor, 
former head of Siemens-Schukert in 


This letter suggests close ties between Bobroff and Durant. 



Memorandum referring to a request from Davison (Morgan partner) to Thomas Thacher (Wall 
Street attorney associated with the Morgans) and passed to Dwight Morrow (Morgan partner), April 
13, 1918. 


• • • 

The Berkeley Hotel, London 
April 13th, 1918. 

Hon. Walter H. Page, 

American Ambassador to England, 


Dear Sir: 

Several days ago I received a request from Mr. H. P. Davison, Chairman of the War Council of the 
American Red Cross, to confer with Lord Northcliffe regarding the situation in Russia, and then to 
proceed to Paris for other conferences. Owing to Lord Northcliffe's illness I have not been able to 
confer with him, but am leaving with Mr. Dwight W. Morrow, who is now staying at the Berkeley 
Hotel, a memorandum of the situation which Mr. Morrow will submit to Lord Northcliffe on the 
latter's return to London. 

For your information and the information of the Department I enclose to you, herewith, a copy of 
the memorandum. 

Respectfully yours, 
[sgd.] Thomas D. Thacher. 


Lord Northcliffe had just been appointed director of propaganda. This is interesting in the light of 
William B. Thompson's subsidizing of Bolshevik propaganda and his connection with the Morgan- 
Rockefeller interests. 



This document is a memorandum from D.C. Poole, Division of Russian Affairs in the Department 
of State, to the secretary of state concerning a conversation with Mr. M. Oudin of General Electric. 


May 29, 1922 

Mr. Secretary: 

Mr. Oudin, of the General Electric Company, informed me this morning that his company feels that 
the time is possibly approaching to begin conversations with Krassin relative to a resumption of 
business in Russia. I told him that it is the view of the Department that the course to be pursued in 
this matter by American firms is a question of business judgment and that the Department would 
certainly interpose no obstacles to an American firm resuming operations in Russia on any basis 
which the firm considered practicable. 

He said that negotiations are now in progress between the General Electric Company and the 
Allgemeine Elektrizitats Gesellschaft for a resumption of the working agreement which they had 

• • • 

before the war. He expects that the agreement to be made will include a provision for cooperation of 

DCP D.C. Poole 


This is an important document as it relates to the forthcoming resumption of relations with Russia 
by an important American company. It illustrates that the initiative came from the company, not 
from the State Department, and that no consideration was given to the effect of transfer of General 
Electric technology to a self-declared enemy. This GE agreement was the first step down a road of 
major technical transfers that led directly to the deaths of 100,000 Americans and countless allies. 

• • •